Council opposes capping what delivery services charge restaurants
Majority of members against intervening in business arrangement
HUDSON — City Council members have decided against moving forward with a proposal that would've restricted the amount delivery services such as DoorDash, Uber Eats or GrubHub can charge restaurants.
The legislation would've capped the commission fee charged by third-party delivery services at 15% of the purchase price and prohibited delivery service companies from reducing their drivers' wages.
Council member Nicole Kowalski (at large) proposed the legislation, saying it was intended as a temporary measure to help businesses during the COVID-19 pandemic. Language in the proposal stated the cap would end 120 days after restaurants are allowed to operate at 100% capacity with no restrictions.
"This is an initiative to help our local restaurants who may not have had the business model to make deliveries …before the pandemic," Kowalski said during a discussion at an April 13 council workshop. "They've already been hit hard and they may be struggling and they really don't have the ability to implement their own delivery drivers, so they turn to these third-party food delivery companies who can take upwards of 30 percent of their profits."
Other council members said they felt that it wasn't council's role to dictate the amount that a business could charge for a service it provides.
"I just don't believe government should be getting involved in this kind of decision," said Councilmember Hal DeSaussure (at large).
In addition, Councilmember Chris Foster (Ward 2) said restaurants in the city "have already largely dealt with this issue."
Smaller restaurants use point-of-sale software that allows them to lower the commission fee paid to third-party services, and establishments are also increasing the price they are charging "in order to accommodate the commission," Foster said.
While he felt the purpose of the legislation is "well-intended," Foster said, "it seems unnecessary because the businesses have already addressed how they manage their business."
Councilmember Kate Schlademan (Ward 1) said she wanted to see more information on how the cap was working in cities where it was passed and talk with Hudson restaurant owners to see if this was something they needed.
Councilmember Beth Bigham (Ward 4) also questioned how enforcement would work after observing that the proposal would classify a violation as a fourth-degree misdemeanor.
"Are we going to have [Solicitor] Matt [Vazzana] chasing around after food companies for a $40 food order? asked Bigham. "It just seems absurd."
Sutton encouraged residents to follow the lead of their neighbors in Stow and rally to support local restaurants.
"[Non-profits are] giving back to the restaurants [in Stow] and they're doing deliveries for the restaurants as a thank you for all the fundraisers those restaurants have done [for the non-profits]," Sutton said. "…I'm putting out a plea again to our community to rally around these businesses. Our community could handle this by themselves without policy regulations from us."
Reporter Phil Keren can be reached at firstname.lastname@example.org, or on Twitter at @keren_phil.