In an effort to help keep food delivery services from slicing into restaurants' bottom lines, the city of Gresham capped the amount of commissions meal delivery services can grab back from local eateries.
Gresham joins Portland, Philadelphia, New York City and others across the country limiting the money third-party delivery services such as DoorDash, Grubhub and Uber Eats can get from restaurants. The delivery services charge restaurants a commission, often between 25% and 30% of a customer's order.
Gresham updated its Emergency Declaration Tuesday, July 21, capping the commissions at 10% in order to help struggling Gresham restaurants survive the COVID-19 health pandemic and economic crisis.
"The economic crisis has hit our local restaurants particularly hard, as they have struggled to survive the months-long closure of their dining rooms, followed by limited seating required under Phase I reopening," said Gresham interim Mayor Karylinn Echols.
Gresham's action also protects the delivery drivers working for these companies, often local residents, by prohibiting them from reducing driver pay or garnishing driver tips.
"We are thankful that app-based platforms exist to deliver food to residents who are, by choice or necessity, staying home. At the same time, we can't allow the pandemic to embolden these platforms to charge commissions on restaurants that, in many cases, are so large the restaurants are nearly unable to cover their already thin margins," Echols said.
Gresham's announcement said the move improves regional consistency, since the cap is the same as Portland's.
"Even before COVID-19, restaurants had razor thin margins. With the additional burdens and obstacles placed on them from state regulations and pandemic guidelines, this move to cap commissions will provide some welcome relief without limiting revenues of those that provide the service," said Lynn Snodgrass, CEO, Gresham Area Chamber of Commerce and Visitors Center.
To help struggling businesses, Gresham has also issued nearly 300 emergency economic grants to local businesses and enacted emergency commercial and residential tenant protections.
The city also imposed a moratorium on disconnects from its public utilities and reassigned staff to provide technical assistance for businesses struggling to access federal emergency assistance funds.
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