PEORIA, Ill. — Peoria City Council voted Tuesday night 10-1 to temporarily limit the amount of money third party food delivery services can charge local restaurants.
The ordinance mandates all such services may only charge 10% of the purchase price of any online order on an individual or cumulative basis, or a total of 15% of a respective restaurant’s monthly sales through any respective third party service.
“With our restaurants’ having limited indoor capacity for dining right now, they are heavily reliant on services such as Grubhub, DoorDash, or Uber Eats. What we’ve learned is some of those delivery services charge as much as 30% of the purchase price back to the restaurants,” said City Attorney Chrissie Peterson.
“Given their limited dining capacities right now, many of them felt like that was just an unsustainable amount.”
Peterson explained major metropolitan areas, such as Chicago, have passed similar ordinances during the most recent wave of COVID.
Mayor and former restaurateur Jim Ardis was an enthusiastic proponent of the legislation.
“Restaurants work on such a small margin, and now that they can’t even have people dining inside, they’re depending totally on either pickup or delivery service. Gouging is the right word for what was being done by these delivery services, and one of the reasons we tried to move this forward is because we wanted to provide relief to restaurateurs,” he said.
“Literally every penny counts right now, and it will going forward, because that’s the desperate situation they find themselves in.”
At-Large Councilman John Kelly explained why he was the one dissenting vote.
“If I were in the restaurant business, I’d want the delivery charges as small as they could possibly be. But we have not spoken with these delivery companies,” he said.
“Everyone wants things for less. I do, but there may be a rationale [for charging high fees], and there may not be, but without this information, I think we’re irresponsible in going forward, just hearing from the restaurants.
“A lot of people would like restaurants to charge less, but restaurants can tell you they can’t charge less. How about these delivery companies?”
The ordinance also makes it illegal for any of the third party delivery services to reduce drivers’ wages or to garnish their tips as a result of Tuesday night’s passage.
Penalties for any violation of the ordinance include fines between $500 and $1,000.
The cap will automatically expire when indoor dining capacity returns to 50% or greater for 60 straight days.
