ST. LOUIS — Food delivery apps are charging customers in the city of St. Louis more money after lawmakers implemented regulations meant to help restaurants amid the pandemic.
Last July, city aldermen unanimously approved legislation capping fees third-party delivery services could charge restaurants at 20%. The bill also mandated that the services disclose what portion of tips drivers actually receive. It's to sunset 60 days after city pandemic health orders expire.
The bill's lead sponsor, Alderwoman Christine Ingrassia, said during a meeting in July that it was about "trying to help (restaurants) stay afloat during the pandemic."
At least two of the services, though, have begun tacking on extra charges to residents' bills — and they're blaming local authorities for them.
DoorDash Inc. (NYSE: DASH) calls the $1 charge a "St. Louis Fee."
"St. Louis has temporarily capped the fees that we may charge local restaurants," the app explains. "To continue to offer you convenient delivery while ensuring that Dashers are active and earning, you will now see a charge added to St. Louis orders."
Similarly, Uber Eats (NYSE: UBER), which didn't respond to a request for comment, says its $1 add-on "may include other fees to offset the cost of government fees and regulations imposed on food delivery apps."
A DoorDash spokeswoman said in a statement that "operating our platform, paying and insuring Dashers, and ensuing high-quality service can be expensive, which is why in many markets, where local governments have passed pricing regulations, we have begun charging customers a small additional fee."
"We realize this isn't ideal, but with these regulations in place, these fees help us to continue providing convenient delivery for customers, meaningful earning opportunities for Dashers, and valuable services that help drive orders for merchants," the spokeswoman said.
Click here for the full story.
