Third-Party Restaurant Delivery Fee Caps Ordinance
Effective December 14th, 2020, the City has approved a temporary 15% maximum on fees that third-party delivery services may charge to restaurants in Centennial as the COVID-19 pandemic emergency continues. This ordinance(PDF, 8MB) will be in effect until the end of the current emergency as declared by the Governor.
If food service establishments within Centennial have been charged more than 15% of the purchase price of an order by a third party delivery services, please send a written complaint to firstname.lastname@example.org and the City will investigate the claim.
About the Ordinance
Under the ordinance, a third-party delivery service cannot:
- provide a service for a restaurant without the restaurant’s consent
- charge any additional fee to a restaurant that has not voluntarily agreed to pay
- reduce the compensation rates paid to the delivery service driver or withhold gratuities or tips to a restaurant, its staff, or any deliver service driver to offset revenue reductions as a result of the cap.
A restaurant may choose to pay a higher commission or supplemental fee in order to access additional advertising or other products and services offered by any third-party food delivery service.
Once the final price is disclosed to a customer for the purchase and delivery of food from a restaurant through a third-party food delivery service, the delivery service must disclose to the customer, in plain language, any commission, fee, or any other monetary payment charged to the customer by the third-party food delivery service.
After a transaction occurs for the purchase and delivery through a third party food delivery service, the service must provide an electronic or printed receipt to the customer that disclose in plain and simple language:
- The purchase price of the food;
- Any sales or other tax applied to the transaction;
- Any delivery charge or service fee, imposed on and collected from the customer by the third-party food delivery service in addition to the menu price of the food; and
- Any tip that will be paid to the person delivering the food, and not to the third-party food delivery service, that was added into the transaction when it occurred.
Restaurants within Centennial pay delivery fees in order to use delivery services offered by third-party providers and in many cases, local restaurants do not have the sales volume or ability to seek modification of these third-party rates for delivery services. In some cases, the delivery fee rate can result in restaurants not fully covering all costs related to a customer’s order. The passing of this fee cap allows third-party delivery services to charge restaurants only up to 15% of the purchase price of an order during times when restaurant capacity is required to be less than 50% by public health orders.
In response to this high delivery-fee issue faced by restaurants, on December 7, 2020, the Governor signed HB 20B-1005, which specifically authorizes counties and municipalities to enact ordinances and resolutions similar to the one approved by the Centennial City Council on December 14, 2020.
The City of Centennial encourages restaurants to inform the third party delivery services of the new restrictions.