The San Francisco City Board of Supervisors in the US have approved a resolution that will permanently cap fee commissions at 15% per order on food delivery apps.
San Francisco has become the first city in the US to enact a permanent cap of this type.
Restaurants have been complaining about the excessive commission fees charged by delivery companies, which can range from 15% to 30% per order.
The Golden Gate Restaurant Association, a trade group that represents thousands of restaurants in the city of San Francisco, has welcomed the new resolution.
However, the city’s Board said that the new legislation will be applicable only to the delivery fees and will not cover costs such as marketing fees.
Golden Gate Restaurant Association executive director Laurie Thomas said: “This legislation will ensure our San Francisco restaurants can continue to operate in a financially sustainable way as they recover from the past year-plus with limited capacity and lost revenue.”
The resolution was approved at a Public Safety and Neighborhood Services committee meeting at the Board of Supervisors.
Some food delivery workers have raised concerns that the new resolution will impact their income levels.
Major cities across the US including New York City, Los Angeles and Chicago have already implemented temporary measures to cap delivery commissions.
Additionally, the new resolution includes a provision to cap credit card processing fees at 3%, which will be voted on by the officials at a later date.
Once the amendments to the legislation are voted on next month, the cap will need final approval from San Francisco Mayor London Breed to become law.