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City seeks to lower delivery fee on food delivery apps for Indy restaurants

Pure Eatery
Posted at 12:31 AM, Mar 04, 2021
and last updated 2021-03-04 00:32:02-05

INDIANAPOLIS — A proposal in the Indianapolis City-County Council will help local restaurants keep more of the money you spend on their food when you order through a third-party app.

It's set to be considered on March 15. It would cap delivery fees at no more than 15% of the purchase price for each online order. Any other fees cannot total more than 5%.

"Those two things together make it 20% and that's materially less than the 30% they're being charged now," Councillor John Barth said.

Barth and Councillor Keith Potts sponsored the proposal. He said it strikes a balance between letting companies like UberEats and Grubhub make money while also giving some relief to local businesses.

"Obviously, we wanted to do our best to support our local business owners throughout the pandemic and this seemed like a logical response," Barth said.

For local restaurants like Pure Eatery, this is a big relief.

"We pay a percentage for every order that goes out. Grubhub, UberEats, a lot of those companies sit around 30% or so for delivery fees," Jason Jacobi, Pure Eatery's owner, said. "Because we're local, we like to locally source everything. We make everything fresh every day. We make all our own soups, dressings from scratch. Our costs sit really high which almost erases any profit that we make through the delivery apps."

Once the proposal is passed, it'll stay in effect until 90 days after restaurants can reopen at 100% capacity.

"We've been squeezed so hard for the last year. Any type of help we can get [is great]... because 30% is high for the service," Jacobi said.

Barth said one way you can make sure your favorite restaurant is getting the money you're paying them is ordering from them directly and picking it up, as opposed to have it delivered.

The delivery apps will face a $500 fine for each occurrence if they violate the proposal once it's passed.