Proposal Would Limit Delivery Service Fees

An Indianapolis City-County Council committee passed a proposal to temporarily limit fees from third party delivery services. The aim is to help local restaurants that have been dealing with restricted capacity for a year now. 

The demand for delivery has increased during the pandemic, but third party delivery services -- like UberEats and Door Dash -- can charge high rates that make it difficult for local eateries to make any money on deliveries. The proposal would cap service charge fees at 15 percent of an order and an additional 5 percent limit for other fees.

Democrat John Barth co-authored the measure and said it is fairly moderate compared to other cities.

“But we’re trying to strike a balance between the need to support our local restaurants and to recognize that the third party entities are operating a business as well,” Barth said.

The proposal passed a Metropolitan Economic Development Committee and heads to the full council with a do pass recommendation.

Barth said part of the effort has been to increase awareness in the general public.

“They generally have no idea that their local restaurants, their friends and neighbors who work at or run local restaurants are taking such a big financial hit from using the third party company,” Barth said.

Delivery service companies could face a $500 fee for noncompliance.

The ordinance would expire when the public health emergency ends and restaurants return to full capacity.