CLEVELAND, Ohio (WOIO) - Cleveland restaurants are still struggle. While takeout is booming, much of the profit goes to delivery apps.
So, Cleveland City Council capped the amount the third party companies could charge Cleveland restaurants at 15% with DoorDash usually charging twice as much.
“The restaurants can’t afford to give up 30% of their revenues just for these delivery fees,” says Cleveland Councilman Anthony Brancatelli. “We thought they might move to shift that burden.”
DoorDash shifted that burden with a “Cleveland Fee,” which is an additional charge to the customer.
DoorDash sent 19 News a statement that read:
“During this unprecedented time, providing the best possible service for our community is critically important. In select cities where lawmakers have imposed price regulations that limit our ability to work with restaurant partners, DoorDash is considering various measures to offset their unintended consequences. In some cases, this means charging customers an additional fee when they order from restaurants in their city to help ensure that we can continue to offer them convenient delivery while helping to ensure that Dashers are active and earning and that merchants can access the services to help drive volume as dine-in remains limited.”
Council President Kevin Kelley also issued a statement:
“DoorDash’s arrogance, hutzpah, and greed is astounding. They are charging an extra $1 per delivery and calling it the “Cleveland fee”.
Council passed legislation limiting how much delivery services like DoorDash could charge businesses on Dec. 9 to help the small restaurants and businesses hurt during this pandemic. The mayor signed it soon after and it went into immediate effect because it was passed as an emergency.
That same day, DoorDash did an initial public offering of stock and was valued at $38 billion dollars. Today, Dec. 29 at about 11:30 a.m. they were valued at $46.98 billion dollars. So of course, being so wealthy, they decided to fleece Clevelanders and in the process hurt small Cleveland businesses.
Council will immediately look into what they can do legislatively about this corporate greed.
Have they no shame?”
The ordinance also protects drivers, making sure the services can’t cut their fees,
“The cap is temporary,” says Brancatelli. “As soon as we get through this pandemic, once the restaurants open back up again, they’ll be able to figure out how do negotiate but right now, we look at that as price gouging back to the restaurants and we wanted to be able to limit that.”
Some restaurateurs says DoorDash is trying to negotiate higher customers fees too. The ordinance automatically expires 90 days after Ohio lifts restrictions on restaurants.