City-County Council proposes limit on fees for third-party food delivery

INDIANAPOLIS (WISH) — The Indianapolis City-County Council on Monday night introduced a proposal aimed at saving restaurant owners money during the coronavirus pandemic.

More people have been using third-party delivery services because of COVID- 19 restrictions. The proposal from two Democrat council members would reduce how much those services can charge businesses. The proposal also would prevent the delivery companies from making up any lost revenue by charging customers more.

The proposal aims to temporarily limit charges and fees during the COVID-19 pandemic by food delivery services. At times during the pandemic, many businesses have found themselves depending on these companies.

“We were relying on them for probably 90% of our business when we went into quarantine,” said Chris Karnavas, owner of Jack’s Donuts.

“I use three of the apps (of delivery services), and the charges are pretty extensive. They are; we are paying about 25%,” said Stergio Poulous , co-owner of Giorgio’s Pizza.

The fees imposed by third-party delivery companies is often a complaint of both businesses who partner with the delivery services and the customers who use them.

“It was even more money last year because, at the end of December of 2020, we were officially 46% down at Giorgio’s Pizza,” Poulous said.

The proposal would limit delivery fees for restaurants to 15% or less of the total of the purchase and would not allow the delivery services to charge restaurants more than 5% for any fees other the delivery fee.

“I don’t know why they are getting involved in it when they should have gotten involved in it months ago and really what is the point,” Karnavas said.

It is a sore subject for some business owners who have had to struggle to stay above water for the last 12 months.

“But, it would have been a lot more helpful if this thing would have went into effect last April or May,” Poulous said.

Some business owners think the efforts from the government to help businesses would be better spent focusing on reopening and getting people back downtown.

“It is a philosophical issue for me. I mean government needs to pretty much stay out of business. I mean we have tried to govern business over the last 12 months when we really should be governing and protecting the citizens,” Poulous said.

If this proposal is passed, a third-party delivery service could face a fee of up to $500 for charging more than the outlined amounts.