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New Palm Springs Ordinance Limits Third-Party Food Delivery Service Fees

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In an effort to prevent food delivery services from overcharging customers and businesses during the COVID-19 pandemic, the Palm Springs City Council recently approved a new ordinance that limits fees that providers such as Uber Eats, Postmates and DoorDash, may charge residents and businesses.

The new Ordinance establishes the following limitations:

  • Food delivery services cannot charge more than a 15% delivery fee on the purchase price of each online order.
  • No more than 5% of the purchase price can be charged to the business for any combination of service fees.
  • All tips must go exclusively to the driver. 

Example: If a customer orders a meal that is advertised at $10 on the third-party delivery service’s app, the delivery service cannot charge more than $10 for the meal. Nor can the service provider charge the restaurant more than $1.50 as a delivery fee — or the restaurant more than 50 cents as a fee or commission for their placement on the delivery service’s app. If the customer agrees to provide the delivery person a $2 tip, that tip amount must go to the delivery person; not the third-party delivery service company.

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