Oakland Municipal Code Ch. 5.97 Cap on the Commissions, Charges, and Fees of Food Delivery Service…

Footnotes:

--- (11) ---

Editor's note— Amended Ord. No. 13613, §§ 2, 3, adopted July 28, 2020, redesignated Ch. 5.94, §§ 5.94.010—5.94.040, as Ch. 5.97, §§ 5.97.010—5.97.050, as herein set out.

For the purposes of this Chapter, the following definitions will apply:

"Covered Establishment" means a restaurant that offers, in a single commercial transaction over the internet, whether directly or through a third-party food delivery service, the sale and same-day delivery of food to customers from one (1) or more retail locations within the City.

"Formula Retail Restaurant" means any restaurant having a standardized name, decor, logo, facade, color scheme, trademark, employee uniforms, merchandise, and signage, throughout their locations and which have twenty (20) or more employees in Oakland and at least forty (40) restaurants worldwide.

"Online Order" means an order placed by a customer through a platform provided by a third-party food delivery service for delivery or pickup within the City.

"Purchase Price" means the menu price of an online order. Such term therefore excludes taxes, gratuities and any other fees that may make up the total cost to the customer of an online order.

"Restaurant" shall have the meaning provided in Section 8.07.020 of this Code.

"Telephone Order" means an order placed by a customer to a food service establishment through a telephone call or the use of the third-party food delivery service provider's platform and/or on-line phone system, or via text.

"Third-Party Food Delivery Service" means any website, mobile application or other internet service that offers or arranges for the sale of food and beverages prepared by, and the same-day delivery or same-day pickup of food and beverages from, no fewer than twenty (20) separately owned and operated food service establishments.

(Ord. No. 13613 (amended), § 3, 7-28-2020)

A. Delivery Fees. It shall be unlawful for a third-party food delivery service to charge a covered establishment a fee per online order for the use of its services that totals more than fifteen (15) percent of the purchase price of such online order.

B. Telephone Orders. No third-party food delivery service may charge any fee from a food service establishment for a telephone order if a telephone call between such establishment and a customer does not result in an actual transaction during such telephone call.

C. Other Costs. In addition to the delivery fees, it shall be unlawful for a third-party food delivery service to charge a covered establishment for any other fee other than the actual cost incurred for credit card processing.

D. Term of Cap. The requirements of this Section apply only during a declared emergency and for a period of ninety (90) days after the end of a declared emergency.

E. Cap Not Applicable to Formula Retail Restaurants. The cap will not apply to any "formula retail restaurant" as defined in Section 5.97.010 of this Code.

(Ord. No. 13613 (amended), § 3, 7-28-2020)

The City Administrator, or his designee, is authorized to implement this Chapter and issue any necessary guidance or rules consistent with this Chapter and this Code.

(Ord. No. 13613 (amended), § 3, 7-28-2020)

This Chapter shall take effect on [and] shall become effective immediately on final adoption if it receives six (6) or more affirmative votes; otherwise it shall become effective upon the seventh day after final adoption and shall be in effect for the duration of the COVID-19 pandemic crisis and for a period of ninety (90) days after the end of a declared emergency.

(Ord. No. 13613 (amended), § 3, 7-28-2020)

A. A third-party food delivery service shall not be found in violation of this order if between the effective date of the ordinance from which this chapter is derived and August 31, 2020, it imposes a fee per online order for the use of its services that totals more than fifteen (15) percent of the purchase price of such online order, provided it refunds the portion of the fee that exceeds fifteen (15) percent of the purchase price to the covered establishment no later than fifteen (15) days after the purchase.

B. If a third-party food delivery service charges a covered establishment fees that violate this order, the covered establishment shall provide written notice to the third-party food delivery service requesting a refund within seven (7) days. If the third-party food delivery service does not provide the refund requested after seven (7) days or the third-party food delivery service continues to charge fees in violation of this order after the initial notice and seven-day cure period, a covered establishment may enforce this order by means of a civil action seeking damages and injunctive relief. The prevailing party in any such action shall be entitled to an award of reasonable attorney fees.

C. Any person that violates any provision of this Chapter or any rule promulgated pursuant thereto shall be subject to a civil penalty that shall not exceed five hundred dollars ($500.00) for the first violation. Any person that violates any provision of this Section or any rule promulgated pursuant thereto shall be subject to a civil penalty that shall not exceed one thousand dollars ($1,000.00) for any subsequent violations. Violations under this subchapter shall accrue on a daily basis for each day and for each food service establishment charged a fee in violation of this subchapter or any rule promulgated pursuant to this Section. A proceeding to recover any civil penalty authorized pursuant to this Section may be brought by the City Administrator pursuant to Section 1.28.0420 of this Code.

(Ord. No. 13613 (amended), § 3, 7-28-2020)