SAINT PAUL, MN –Today, the House Commerce Committee advanced legislation authored by vice chair Carlie Kotyza-Witthuhn (DFL-Eden Prairie) to cap fees for restaurants that partner with third-party food delivery services.
“Throughout the pandemic, many Minnesotans have taken advantage of ordering delivery from their local restaurants – this serves a dual purpose of keeping your family safe and healthy with a restaurant meal at home while supporting a local business during these challenging times,” said Rep. Kotyza-Witthuhn. “The hospitality industry is facing an uphill road to recovery and this bill will provide much-needed relief to local businesses across the state and ensure they can continue serving our communities now and into the future.”
While the business model and fees for the third-party delivery platforms vary from one another, many eateries have reported paying commission of over 30% of the purchase price of the order.
Rep. Kotyza-Witthuhn’s legislation would limit the amount a third-party food delivery service can charge a restaurant for delivery to 15 percent; 10 percent for the delivery and 5 percent for additional fees. The bill also protects current compensation wage rates paid to delivery service drivers.
“We know Minnesota restaurants have been hit incredibly hard during the pandemic and have been struggling to hang on for nearly a year,” said Chair Zack Stephenson (DFL-Coon Rapids). “This legislation ensures our restaurants can protect more of the profits they need to stay afloat, while also safeguarding workers’ wages. I thank vice chair Kotyza-Witthuhn for bringing this critical initiative forward.”
Testifiers from Minnesota Hospitality, Minnesota Craft Brewers Guild, Minnesota Events Coalition, and Minnesota Licensed Beverage Association shared their support for the legislation.
To date, the cities of Minneapolis, St. Paul, and Edina have implemented their own local fee caps for restaurants utilizing third-party food delivery services.
Materials and presentations from the committee can be viewed on the House Commerce Committee’s website.