An Uber Eats delivery person. (Photo via Flickr)

Santa Clara County supervisors are poised to approve a 15 percent cap on third-party food-delivery fees by next week in an effort to support local restaurants amid a stricter county health order.

The board unanimously voted on Tuesday to expedite a draft of the ordinance so it could approve and immediately implement the cap at its next meeting on Dec. 15, instead of waiting until Jan. 12 as originally proposed.

“These restaurants need help now,” Nate LeBlanc, business development manager for the San Jose Downtown Association said during the meeting. “Many of our restaurant members just spent the last remaining cash reserves they had on what we’re calling ‘winterization’ tents and canopies that are rendered basically unusable under this new order.”

Since the health order was implemented on Sunday, restaurants have had to close outdoor dining to patrons, leaving them to rely on delivery or take-out orders to sustain their business until the next year.

And while third-party delivery services may seem like a lifeline, apps such as DoorDash, Grubhub and Uber Eats often charge restaurants upwards of 30 percent of the purchase price for delivery and as much as a 15 percent commission for customer pick-up ordered through the third-party online platforms.

On their websites, delivery service platforms say charges are used to cover the costs from delivery and marketing to business listing and credit card processing, but restaurant owners say those charges cut significantly into their profits.

“These fees are a huge cost,” Jennifer Verner, Opa! Management Group business operations manager, said in a letter to the board. “We are paying, in some cases, 30 percent for delivery and when you factor in labor costs and COGs (cost of goods), we are oftentimes barely breaking even.”

LeBlanc said the cap would allow restaurants to “weather this long dark winter we’re about to have from a financial standpoint.”

“Our members can live with an up to 15% cap, not the 30% fees that we’re seeing,” he said.

Supervisor Joe Simitian, who co-sponsored the proposal with Supervisor Cindy Chavez, said the goal of the cap was to protect both restaurant owners and employees as well as customers from the high fees and commissions.

But he also emphasized that the proposed ordinance would also protect gig workers and drivers for the third-party delivery companies because it prohibits wages or tips being cut by the parent company.

“If there are lower fees collected by the company, presumably there is less to share with drivers. I suppose that is an argument,” Simitian said in a news conference Monday. “But let me just say that before the pandemic, the fees were held at a more modest, and I would argue reasonable level, that didn’t capitalize on the difficult circumstance we are now facing.”

The proposed ordinance also calls for more fee transparency, as supervisors noted that additional fees are often unclear for customers.

Supervisor Mike Wasserman said he was “astounded” when he learned how the fees impacted restaurants.

“That simply makes it profit-prohibitive to do delivery,” Wasserman said. “This is absolutely needed right now as soon as possible, and I’m fully supportive of whatever we need to make it happen.”

The city of San Jose may also move in the same direction and will discuss a cap on Wednesday.

“Given the legal challenges that the county may face in regulating fees in incorporated areas countywide, we will continue pushing forward our proposed fee cap within the City of San Jose to relieve the unnecessary extra burden for hundreds of our struggling restaurants,” San Jose Mayor Sam Liccardo said on Monday.

If the cap is adopted, Santa Clara County would join a long list of Bay Area jurisdictions that have already moved to curb delivery fees, including San Mateo, Alameda and Marin counties, as well as the cities of Oakland, Santa Clara and Santa Cruz.