The ordinance changes restrictions that were made during the COVID-19 pandemic to aid businesses relying on food deliveries. (photo by Tabor Brewster)

The Beverly Hills City Council passed an ordinance on March 18 that adjusts pandemic-era restrictions on food delivery services like DoorDash and Uber Eats. The revisions will benefit the food delivery apps by allowing them to charge restaurants higher fees while giving businesses more choices in the services the apps provide. Delivery services were previously limited to charging restaurants a 15% fee on orders. The new ordinance allows them to charge higher fees if they provide additional services beyond basic deliveries, such as running promotional campaigns for the restaurants through their apps.

“In the end, our [chamber of commerce] is comfortable with this. And the key to it is, it preserves the right of the business to make a decision,” Mayor Julian Gold said.

In March 2020, the city passed emergency regulations in response to the COVID-19 pandemic that limited food delivery services to charging restaurants 15% of the purchase price on an order. In addition, it prohibited the delivery services from charging more than the menu price and ordered all tips be given to the driver. In March 2023, the city codified the emergency restrictions into the city’s permanent municipal code.

However, in March 2022, a judge ruled that a similar ordinance in San Francisco might violate the rights of food delivery service companies. Following a lawsuit from Doordash and GrubHub, San Francisco modified its ordinance to exempt the companies from the 15% delivery fee cap if restaurants opt-in to receive other services from the apps, such as marketing and promotions. DoorDash and GrubHub dropped the lawsuit as a result of the modified ordinance, according to city attorney Laurence Wiener.

Beverly Hills municipal affairs program manager Cindy Owens outlined the revisions to the ordinance to the City Council. The new ordinance in Beverly Hills closely follows that of San Francisco. According to Owens, the 15% cap will be preserved for “core delivery services” while allowing restaurants to opt-in to higher pay rates for other services. The revisions also prohibit delivery services from changing menu prices without the consent of restaurants and allow restaurants to terminate their food delivery service contracts with a 72-hour notice.

According to Owens and Wiener, the city was approached by DoorDash to adjust the ordinance following the similar situation in San Francisco.

“DoorDash said, ‘we think San Francisco is a better model,’” Wiener said. “They were more polite than saying, ‘we’re going to sue you.’ We said for us to take it forward to the City Council, you’ve got to get the chamber of commerce on board.”

The city worked with local businesses, the Beverly Hills Chamber of Commerce and DoorDash to find a solution.

“Over the past couple months, DoorDash has engaged in insightful conversations with the city and members of the business community to discuss the issues surrounding third-party food delivery services,” a statement from DoorDash read. “We believe that the amendments to the municipal code address concerns and demonstrate a commitment to finding solutions that work for everyone involved. This collaborative effort between the city, the chamber and the business community highlights the importance of cooperation in addressing the evolving needs of our local economy. DoorDash values this relationship with the Beverly Hills community and looks forward to [continuing] to be a responsible partner in supporting local businesses and residents.”