MODEL BILLS

Fair Prices for Food Delivery Act

Summary: During a public health emergency, The Fair Prices for Food Delivery Act prevents third-party food delivery platforms from charging a fee in excess of 15 percent of the restaurant’s purchase price.

Based on District of Columbia Bill 23-750 (2020). For factual background, see “Restaurants are barely surviving. Delivery apps will kill them.” Washington Post, May 29, 2010.

SECTION 1. SHORT TITLE

This Act shall be called the “Fair Prices for Food Delivery Act.”

SECTION 2. PURPOSE

This law is enacted to protect consumers and restaurant businesses during the coronavirus public health emergency.

SECTION 3. FOOD DELIVERY SERVICES

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS

For purposes of this section:

(1) “Online order” means an order placed by a customer through a platform provided by a third-party food delivery service for delivery or pickup within the [jurisdiction].

(2) “Purchase price” means the menu price of an online order, excluding taxes, gratuities, or any other fees that may make up the total cost to the customer of an online order.

(3) “Restaurant” shall have the same meaning as provided in [cite existing law].

(4) “Third-party food delivery platform” means any website, mobile application, or Internet service that offers or arranges for the sale of food and beverages prepared by, and the same-day delivery or same-day pickup of food and beverages from, restaurants.

(B) DISCLOSURE AND LIMIT ON FEES

During a public health emergency and for 30 days thereafter:

(1) A person, corporation, partnership, or association operating a third-party food platform within the [jurisdiction] shall register with the [Department of Consumer Affairs].

(2) It shall be unlawful for a person to cause a third-party food delivery platform to charge a restaurant a commission fee for the use of the platform’s services for delivery or pick-up that totals more than 15 percent of the purchase price per online order.

(3) It shall be unlawful for a person to cause a third-party food delivery platform to reduce the compensation rate paid to a delivery service driver or garnish gratuities in order to comply with subsection (2) of this section.

(4) At the time a final price is disclosed to a customer for the intended purchase and delivery of food from a restaurant through a third-party food delivery platform and before that transaction is completed by the customer, the third-party food delivery platform shall disclose to the customer, in plain language and in a conspicuous manner, any commission, fee, or any other monetary payment imposed by the third-party food delivery platform on the restaurant as a term of a contract or agreement between the platform and the restaurant in connection with the restaurant’s use of the platform.

(C) ENFORCEMENT

(1) A person who violates this section shall be subject to a fine of not less than $250 and not more than $1 ,000 for each such violation.

(2) A violation of this section shall be a civil infraction for purposes of the [cite existing consumer protection law].

(3) The [Mayor], pursuant to [cite existing administrative procedure act], may issue rules to implement the provisions of this section.

SECTION 4. EFFECTIVE DATE             

This law shall become effective on June XX, 2020.