Mass. Restaurants Worried Food Delivery Fees Could Go Up When State of Emergency Ends

Getting food delivered became a lifeline for many people during the coronavirus pandemic, but now some restaurants in Massachusetts are worried about fees that could go up.

At Krueger Flatbread in Haverhill, they’re done with third-party delivery companies.

“It just didn't make financial sense for us to give away 30-percent of the bill,” said general manager Jason Petrou. “We cut them off completely.”

Even when the fees were capped at 15-percent by the state because of the pandemic, Petrou says it was just too much as the restaurant tried to survive.

“Quite frankly, I think it was gouging the restaurants that are already run on very razor thin margins as it is,” he said.

Now that business is improving, he’d consider bringing back the delivery companies but only if the fees remain capped.

But the caps are expected to expire mid-June when the state of emergency in Massachusetts will officially be over.

“If it was not ok to price gouge during the shutdown, it’s not ok to start price gouging these restaurants immediately after the state of emergency is lifted,” said State Senator Diana DiZoglio, who wants to extend the caps for two years but so far the legislation has failed multiple times.

“There are very powerful lobbyists on Beacon Hill hard at work that represent DoorDash, that represent Grubhub, and these other third party delivery fee services,” said Dizoglio.

In a statement, DoorDash said, in part, that it "has always supported Massachusetts restaurants. Price controls lead to fewer orders for restaurants and lost earnings for Dashers."

DoorDash said its new pricing structure allows local "restaurants to choose a pricing plan with a delivery commission rate as low as 15% with the ability to add additional services and options."

The company also said its always eager to "engage with policy makers on solutions that truly support restaurants."

And GrubHub said in part that "fee caps are arbitrary price controls and exactly the wrong thing to do when restaurants need more support, visibility and order volume than ever.”

"Any caps on fees -- regardless of the duration -- result in damaging, unintended consequences for locally-owned businesses, delivery workers, diners and the local economy," the statement read. "As the Commonwealth emerges from the pandemic and restaurants are able to open their doors again, these controls hurt restaurants’ ability to get back on their feet."

Paola Gonzalez at Casa Blanca in Haverhill says takeout and delivery is about 40 percent of business.

She doesn’t like the fees, but the multiple delivery companies the restaurant uses are critical just to break even.

“This is the way to survive,” said Gonzalez. “That’s how everything is working out now with the third parties.”

DiZoglio says she plans to reintroduce the legislation later this week.