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Is it time for UK cities to follow Los Angeles and limit delivery service charges?

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L.A. City Council’s imposition of an upper limit on third-party delivery service charges last June marked a victory for restaurants in one of the world’s worst hit countries by COVID-19.

Los Angeles officials passed a motion forbidding delivery companies to charge fees over 15% of the price of an order in the city.

Councilman and author of the new law Mitch O’Farrell said, “During the pandemic, it is estimated that up to 90% of restaurant sales are attributed to delivery orders,” asking the question, “Why should our local mom-and-pop restaurants, as well as their customers, be put in a position to subsidize delivery app companies? This is about local interests over Wall Street interests. Only a level playing field will help our small businesses survive.”

L.A. lawmakers noticed the potential for delivery firms to take advantage of independent restaurants and takeaways left with almost no other option but to use these services to survive, and jumped into action to protect them from exorbitant charges.

Meanwhile in the United Kingdom, the government’s latest set of coronavirus regulations have done quite the opposite. Westminster’s restrictions on the hospitality sector in England make it mandatory for restaurants to close to dine-in customers and collection takeaways at 10pm, but still allow delivery giants Just Eat, Deliveroo and Uber Eats to operate after the cut-off time.

This means that many restaurants are faced with a choice between foregoing important sales after 10pm or using third-party delivery services that can charge excessive commission rates of up to 35% of an order, eating into these small businesses’ essential incomes.

With use of these services almost enforced after 10 o’clock in English towns and cities, BritShish is calling on local governments across the country to follow the lead of Los Angeles, and take action to protect the vital revenue that so many independent restaurant and takeaway owners and employees rely on, by limiting the fees a delivery service can charge in their areas.

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