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Grubhub, DoorDash Will Soon Have To Show You What They’re Charging Restaurants For Delivery

The city will require food delivery services to tell customers how much money they're charging restaurants, which are struggling during the pandemic, for deliveries.

Cesar's Killer Margaritas Owner Israel Sanchez has been making deliveries himself to avoid losing money to Grubhub.
Facebook/Cesar's Killer Margaritas-Broadway
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CHICAGO — Services like Grubhub and DoorDash will soon have to tell customers just how much they’re charging restaurants for delivering food.

The city is implementing new rules that will require third-party delivery services to give customers a breakdown of their purchase, including information on what commission or service fee a restaurant had to pay for the delivery, how much the food cost and taxes on the food. The changes go into effect May 22.

The changes come as restaurants are struggling to make it through the pandemic and statewide shutdown. Restaurant owners have said the third-party delivery services have made it even harder to survive because their fees are so high but they’re widely used by customers.

Some owners have even gone as far as to tell customers not to order their food through third-party delivery services and to instead order direct so they don’t lose out on much-needed money.

“It’s very important there’s transparency,” Lightfoot said Tuesday morning. “I think the average customer who’s ordering wants to know what the actual payment is, what the fee is gonna be for the restaurant.

“And if a delivery service is taking what I think some have alleged, which is an inordinate amount of the fee, making it difficult for restaurants to be able to earn what are already very tight margins, I think the average consumer wants to know that and is going to act accordingly on the basis of that information.”

Most delivery services charge restaurants a commission fee — and it’s sometimes up to 30 percent of the menu price of the food, on top of a fee for delivering the food, according to the city.

That means restaurants are getting far less money than it appears from delivery, even though some customers are explicitly ordering out so they can support beloved eateries during the pandemic.

Lightfoot said her family ordered food Monday night and there was “very little transparency” about how things were charged and who’d have to bear the cost. Customers have a right to know what restaurants are being charged for deliveries so they “can make choices wisely,” the mayor said.

The city’s talked with the delivery services, restaurants and consumers and decided the changes were the best way to move forward, Lightfoot said.

If a delivery service violates the rules and doesn’t show customers the breakdown of charges, it can face a daily fine of $500-$10,000, according to the city.

The rules will continue even after the COVID-19 crisis is over and will apply to any service that arranges sales for a restaurant, bar or other food-serving business, according to the city.

“It’s certainly our hope we’re not gonna have to force the food delivery apps into compliance, but if we do, we will,” Lightfoot said.

The Illinois Restaurant Association praised the changes, with President Sam Toia noting food delivery has become “essential” for restaurants trying to make money while dine-in eating is banned.

“Diners deserve to know exactly how much of their money is going to a third-party delivery service when they use those platforms to order from their favorite local restaurants,” Toia said in a press release. “These rules are a step in the right direction to bring much-needed transparency to the food delivery space, and help customers make educated decisions to further support restaurants throughout Chicago’s 77 communities.”

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