City of Santa Cruz limits third-party delivery company commissions

SANTA CRUZ, Calif. (KION) The City of Santa Cruz said it is placing a temporary limit on commissions charged by third-party food delivery companies.

Starting April 16, the City will put a 15% limit in place.

The City said it hopes the order will help businesses struggling financially during the Shelter in Place. Many people are using third-party apps and websites during the Shelter in Place, in part because restaurants are limited to delivery and takeout while the order is in effect. The City hopes that limiting the commission to 15% per order will help restaurants struggling to stay open while also allowing the third-party companies to earn profits.

“At a time of heightened health concerns because of COVID-19 and shelter in place order, the small restaurant owners and their employees are working to provide local sourced food with delivery services but the fees (commissions) of those 3rd party deliveries takes away the entire cost of the food delivered, the city’s emergency order will effectively keep our small restaurant in business," said Zach Davis, who owns three businesses in Santa Cruz and co-founded the Glass Jar.

The City of Santa Cruz declared a local emergency in response to COVID-19 on March 10, and that gives the City Manager authority to take actions in the City's interest. City Manager Martin Bernal signed the executive order to limit commissions Monday morning.

Read the order here.