Dublin and Hilliard unlikely to impose cap on third-party food-delivery fees

A. Kevin Corvo
ThisWeek group
Hilliard resident Ghafar Khan, 30, a driver for Uber Eats, picks up an order Jan. 11 at Nasty's Sports Bar & Restaurant, 4561 Scioto Darby Road in Columbus, from owner Frank Profeta, just before kickoff of the NCAA football championship game between Ohio State University and the University of Alabama. Columbus has a 15% cap on commission fees for third-party food-delivery services. Some central Ohio cities, including Dublin and Hilliard, have considered capping the fees but have chosen not to do so.

The COVID-19 coronavirus pandemic has affected nearly every facet of American lifestyles – and particularly the restaurant industry.

At times during the course of the pandemic, indoor dining rooms in Ohio had been ordered closed by state officials. Many resumed in-person dining in late spring with reduced seating capacity, but an ever-increasing number will not open their doors again.

Many restaurants adapted to survived by increasing their focus on carryout and delivery services for restaurant-prepared food, sometimes by such third-party services as DoorDash, Grubhub and Uber Eats.

The increase in the use of third-party delivery businesses and their associated fees has led some cities, such as Columbus, Cleveland and Cincinnati, to cap commission fees that added on to the food order.

Columbus City Council enacted legislation in November to create a 15% cap on commission fees.

The provision will expire 120 days after COVID emergency restrictions are lifted, allowing restaurants to operate in-house dining at 100% capacity again, The Columbus Dispatch reported.

The measure had been pushed for months by local businesses, who complained that because of the pandemic, delivery services were effectively wiping out roughly all of their profits, according to the Dispatch.

According to clevelandscene.com, Cleveland City Council in early December enacted a 15% cap that is in effect “until 90 days after dine-in service returns to normal.” Restaurants routinely pay upwards of 30% of the purchase price to third-party services, the article said.

And according to wcpo.com, Cincinnati City Council in May 2020 also levied a 15% cap on third-party delivery services.

Meanwhile, some central Ohio suburbs, including Dublin and Hilliard, also have considered such a measure but have chosen not to pursue it.

City managers Dana McDaniel of Dublin and Michelle Crandall of Hilliard both floated the idea.

Dana McDaniel is city manager of Dublin.
Michelle Crandall is city manager of Hilliard.

Crandall suggested the idea of a cap to Hilliard City Council on Dec. 14.

She told council members that a city staff member had canvassed area restaurants and learned that most thought such a measure would be helpful.

Even so, Libby Gierach, president and CEO of the Hilliard Area Chamber of Commerce, said via the city's outreach she understood that many Hilliard restaurants were in favor of such an effort but acknowledged it would be a "hollow ordinance" difficult to enforce.

City officials also acknowledged enforcement difficulties.

“The city found that there were legal limitations on the city’s ability to impose and enforce caps on delivery fees, so it was decided not to pursue the idea,” said David Ball, director of communications for Hilliard.

Frank Profeta, owner of Nasty's Sports Bar & Restaurant, 4561 Scioto Darby Road in Columbus, just outside Hilliard, said restaurants need such a measure.

Profeta said Nasty's utilizes drivers from Grubhub and Uber Eats.

The Columbus ordinance mandates that delivery services rebate any charges over 15%, except those "to obtain optional products or services, including advertising, marketing, or access to customer subscription programs, in addition to delivery or pickup service,” and any contracts that restaurants have already entered into stand.

The fees are taken directly from the restaurant and are not seen by the customer, who is charged only the amount for the food order, as if the customer had picked it up or ordered in, Profeta said.

The customer typically would tip the driver, though, he said.

Furthermore, delivery services as an industry do not allow restaurants to charge higher fees than those charged inside the restaurant for the same entree or food item, Profeta said.

On what he called "the biggest playoff game in Cleveland history," Profeta said about one-third of the food orders Jan. 10 were delivery orders when the Cleveland Browns and Pittsburgh Steelers faced off in the first round of the NFL playoffs.

Profeta continues to lament the state curfew in place through at least Jan. 23. It dictates that restaurants – and most retail establishments – must close to in-person customers by 10 p.m., which was well before end of the Browns-Steelers game Jan. 10 and the NCAA football championship game between Ohio State University and the University of Alabama on Jan. 11.

"This has to end soon," Profeta said.

He said when he closes before the end of such games, his patrons are likely to gather at residences, where the social distancing practices in place at restaurants likely are not practiced, thus undermining the intended goal of the coronavirus curfew.

Despite a typical loss on food-deliveries, the business would lose even more by opting out, he said.

McDaniel said in December that Dublin was considering a cap either via a resolution of Dublin City Council or an executive order.

“(Dublin) was asked to consider the cap on food-service delivery charges by Visit Dublin, the Ohio Restaurant Association and a few local restaurants,” said Lindsay Weisenauer, public-affairs officer for Dublin.

Scott Dring, president and CEO of Visit Dublin Ohio, had written in an email to council members that Dublin “creating a temporary ordinance limiting delivery surcharges would be a tremendous boost” to area restaurants.

“We are not moving forward with any action at this time,” Weisenauer said. “The city encourages residents to support our restaurants and to be cognizant of the rates they are being charged for delivery services. If rates exceed 15%, customers should leverage complaints directly to the delivery company or not use their services. This will go further than passing legislation the city would have difficulty administering and enforcing."

kcorvo@thisweeknews.com

@ThisWeekCorvo