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Minneapolis imposes 15% cap on third-party takeout delivery fees

Mayor Jacob Frey says restaurants are being hit with charges up to 40% the value of an order.

The City of Minneapolis has announced emergency measures capping the amount that a third-party delivery company can charge restaurants for delivering takeout orders.

Mayor Jacob Frey announced the cap Monday, saying that third-party companies will not be allowed to charge restaurants more than 15% of the total value of the order for its delivery.

Restaurants have increasingly turned to third-party delivery companies such as DoorDash, BiteSquad and GrubHub as they handle the increased demand for takeout during the pandemic, but Frey says in some cases restaurants have been charged up to 40% of the value of the food ordered to get it delivered.

The emergency order, which will remain in place until 90 days after the city's COVID-19 emergency ends, will cap the amount delivery services can charge restaurants at 15% of the order value, though they can charge more for additional services and products provided the restaurant agrees to pay.

What's more, it says customers can expect "increased transparency when placing an order through a third-party food service delivery platform," such as a breakdown of the meal price, a tip to the restaurant, a tip to the delivery driver, and any commissions or fees the platform charges.

And what's more, Frey says that delivery drivers "can expect to be compensated at the same rate of pay with no reduction to tips/gratuity by the third-party food service delivery platform to meet the terms of this emergency regulation."

Frey credits Minneapolis City Council member Lisa Goodman for being the "driving force" behind the order.

“The Twin Cities restaurant scene is an envy of the nation,” said Goodman. “This new policy reflects a commitment to having their backs as they confront challenges beyond their control. Making sure they get to keep more of their sales while maintaining access to delivery services will be good for the businesses and good for the overall health of our economy.”

The new rule prevents third-party delivery platforms from carrying out services for or disclosing information about a restaurant without the restaurant's consent, and can't charge them any fees that they've not voluntarily agreed to pay.

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