Los Angeles Mayor Eric Garcetti signed a law on June 5 that limits delivery app charges to restaurants, capping delivery fees at 15% and all other non-delivery charges at 5%.

The ordinance was created through a motion authored by Los Angeles City Councilman Mitch O’Farrell, 13th District.

“Our local, independent mom and pop restaurants have been struggling to survive since the pandemic began,” O’Farrell said. “Restaurants and their customers are basically subsidizing venture capital funded delivery app companies with this unfair arrangement. The ordinance also protects the delivery drivers who work for these companies. This is a victory for Main Street over Wall Street.”

The ordinance, which was unanimously approved by the City Council last week, went into effect immediately, with a 15-day grace period to allow for third-party food delivery services to adjust their practices. It will allow restaurants to use third-party delivery apps to sustain business without being locked into fees that can exceed 30%.

“With this temporary cap on delivery fees, Los Angeles is helping save local restaurants and keep their workers on the job during this economic upheaval,” Garcetti said. In addition to capping delivery fees at 15% and all other non-delivery charges at 5%, the ordinance also requires that 100% of tips be given to delivery drivers. The ordinance is temporary and remains in place for 90 days beginning on June 1, when the city’s order prohibiting on-premises dining was lifted.