When Long Beach restaurateur Carl Dene heard that the percentage of fees food delivery apps like GrubHub, UberEats and PostMates charge restaurant owners could be limited, he wondered what had taken so long for politicians to take legislative action that will help small businesses.
“My first reaction was great and it's about time because I've seen it elsewhere and my second reaction is the devil is in the details,” Dene told Southern California Record.
Assemblywoman Lorena Gonzalez (D-San Diego) proposed last week restricting to 15% the amount food delivery apps can charge restaurant owners, according to Courthouse News.
“There's been a lot of pressure from the restaurants and the California Restaurant Association so I think they're trying to throw us a bone by presenting a 15% cap on food delivery app fees,” Dene said. "It's a little late."
Dene argues that the food delivery apps have been taking advantage of the COVID-19 outbreak by charging restaurant owners higher fees.
“Uber eats was calling me up for 25%,” Dene said. “Postmates has come down to 21% and DoorDash has been really aggressive in the 18% to 20% range. It really depends on the fine print.”
About 50% of sales at Dene’s eatery, Michael’s Downtown in Long Beach, are through a food delivery app.
“We're paying $300 to 400 a day in food delivery app fees and it could be higher on certain days for sure,” he said.
If Assemblyman Gonzalez’s proposal passes, Dene said he would immediately be able to save some money.
“I could save $80 to $100 a day if food delivery app fees were capped at 15% and that would be enough to hire another employee,” he said.
Dene added that he had considered hiring a delivery driver at the height of the pandemic but one would not be enough to cover the dining rush hours at lunch and dinner.
“Before COVID, it was consistency and not enough sales to support hiring a driver and during the pandemic, there's been an argument to think about it, but it was really hard to get people to work at the beginning because they were getting more money to sit home,” Dene said. “That was a big challenge for us.”
Now that Gov. Newsom has lifted stay-at-home orders and a ban on outdoor dining, Dene expects his current revenues to double.
“In the beginning, the novelty was support restaurants and order takeout and that wasn't bad,” Dene said. “It was sustainable at the beginning, but then after the second lockdown, nobody cared, and nobody came out for takeout meals. We're at 25% of what sales were at the beginning of the pandemic.”