Las Vegas Sun

October 21, 2020

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Food delivery apps defying county’s cap on fees, restaurants say

Third-Party Delivery Fees Capped

Steve Marcus

Signs at the bar designate spots for third-party pickup orders at Tacotarian, on the corner of Casino Center Boulevard and California Avenue, Wednesday, Aug. 5, 2020. The Clark County Commission passed an ordinance on Tuesday, Aug. 4, that prevents third-party companies from charging restaurants more than 15% in fees for their delivery services.

Multiple Clark County restaurant owners say third-party delivery companies aren’t following a temporary cap in service fees while the coronavirus state of emergency is in effect.

Under an emergency ordinance approved last month by the county commission, third-party companies like Grubhub, Uber Eats and DoorDash are prohibited from charging restaurants more than 15% of the price of online orders. Delivery companies also can’t reduce drivers’ pay or increase service order fees.

Customers have become dependent on delivery as they remain at home to limit the spread of coronavirus. And with restaurant dining areas at 50% capacity under state guidelines, some establishments don’t have the ability to opt out of third-party delivery if they want to stay in business.

The ordinance went into effect immediately, but officials say the Clark County Department of Business License is already investigating complaints related to overcharges.

One delivery company says its fees are in accordance with the ordinance — at least in the way it interprets the rules.

A Grubhub spokesperson said the company closely reviewed the ordinance and took steps to ensure delivery fees paid by restaurants did not exceed 15%. But the cap doesn’t apply to marketing or advertising services, which they will continue to charge for.

“The Clark County ordinance only applies to fees for delivery services and does not place any cap on marketing or advertising services that local restaurants choose to pay to drive more orders that are unrelated to our delivery services. We have always been a marketing engine first and foremost that allows independent restaurants to compete against enterprise brands and restaurant chains for diners,” a GrubHub spokesperson wrote in an e-mail.

That’s not sitting well with restaurant owners, many of whom are struggling to keep their doors open.

Colin Fukunaga, owner of Fukuburger, said it took him awhile to figure out he was being overcharged through what he considers hidden marketing fees. He tweeted a receipt showing Grubhub charged a 20% marketing fee in addition to a 10% fee for delivery.

“Everybody has a lot on their plate already and these are billion-dollar companies. It’s really up to the businesses to pay attention,” Fukunaga said.

Aaron Bradley, owner of The Juice Box LV, cut off business with one service because of their noncompliance, even though his business relies on delivery.

“They didn’t seem interested in working with me or taking the enforcement seriously, so I just didn’t have any trust there,” Bradley said.

Commissioner Tick Segerblom, who sponsored the ordinance, said if companies aren’t complying, the commission will amend the ordinance to cap delivery fees at 10%.

“I would urge the companies to not try to be cute, because they’re going to end up paying double,” he said.

He added, “This is a life-or-death issue for these small restaurants.”

Businesses can contact the Clark County Department of Business License at [email protected] to provide documentation showing the alleged overcharges. Las Vegas, North Las Vegas, Henderson, Boulder City and Mesquite are not within Clark County jurisdiction.