Centennial Places Cap on Third Party Delivery Services

Published on December 18, 2020

man delivering package to home

The City of Centennial 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.

Restaurants within Centennial pay delivery fees in order to use delivery services offered by third-party providers like Grubhub, Uber Eats, DoorDash, and Postmates. In addition, these services charge a delivery fee to the ordering customer. 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.

Numerous cities throughout the U.S. including many in Colorado -- such as Denver, Broomfield, Aurora, Englewood, San Francisco, Tucson, Cincinnati and others -- have already adopted a similar ordinance.

“Restaurants continue to be adversely affected by executive and public health orders imposing capacity restrictions as a result of the ongoing public health crisis. The City of Centennial recognizes the challenges these orders have placed on local restaurants resulting in severe impacts to businesses and the economy and hope this fee cap will give some relief,” says Centennial Mayor Stephanie Piko.

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.

“Our business community, especially restaurants have been struggling throughout 2020. Especially now, with colder weather and tighter restrictions it was critical we do something to assist our local restaurants,” says District 2 Council Member Christine Sweetland. “The City is committed to doing what we can to support our business community through these very trying times.”

This recent ordinance will be in effect until the end of the current emergency as declared by the Governor. In addition to limiting the per-order fees that can be charged by third-party food delivery services to restaurants, delivery services must have the consent of restaurants in order to deliver a restaurant’s products and must disclose many of the involved fees such as the delivery service charges to be paid by the customer. The ordinance also prohibits third party delivery services from recouping any losses from the implementation of this cap by withholding amounts from gratuities paid to drivers or restaurant staff. Restaurants may file a complaint by emailing thirdpartyfee@centennialco.gov