A potential ordinance that would limit the fees third-party delivery services can charge restaurants narrowly survived being voted down after a heated discussion between City Council members.
The fee cap, which would allow Grubhub, DoorDash and similar apps to charge no more than 20% of orders in fees, faced unexpected opposition on Tuesday after Mayor Bob Frutos voted against a motion to introduce the ordinance for future consideration. Frutos previously voted in favor of an unsuccessful attempt to approve a similar emergency ordinance, but this week joined Councilman Sharon Springer in opposing it.
However, after Councilman Konstantine Anthony — who has recused himself multiple times from voting on related motions — revived the discussion and provided a tie-breaking vote; the potential ordinance is now scheduled for a second hearing during the council’s March 30 meeting.
The fee cap has proved a controversial issue among council members, with Anthony’s reversal of his self-recusal adding an additional point of disagreement. When the ordinance failed to pass, 2-2, he requested another vote be held.
The return of the potential ordinance to the agenda itself underwent a vote, falling along similar lines as the previous one did — Councilmember Nick Schultz and Vice Mayor Jess Talamantes voted approvingly, with Anthony joining them.
Frutos strongly disagreed with Anthony’s actions, however, expressing concern that it set a dangerous precedent and encouraged council members to dip in and out of self-recusal according to how a vote turns out.
“I think there’s an ethical dilemma,” Frutos said, “where you’re allowing the manipulation of the outcome of agenda items, because [Anthony] recused himself since day one.”
Anthony, who said he recused himself before because he was interested in working for a third-party delivery service in the future, pledged not to apply for such positions.
“Honestly, the optics of this was the original reason I stayed away,” he said.
Anthony has also previously worked as a driver for Uber.
Schultz first requested the council consider an ordinance capping third-party delivery fees in January. Advocates, including Anthony, Talamantes and the local Chamber of Commerce, believe the cap would help protect small restaurants who depend on their services during the pandemic.
“My vote is to protect the small business, small restaurants,” Talamantes said. “Bottom line, this is the … reason I’m going to be voting for this.”
Schultz also said that the Chamber of Commerce had surveyed more than two dozen restaurants and found that the vast majority of them wanted a fee cap.
But Frutos explained he changed his position after seeing the return of indoor and outdoor dining, and worried that the city would spend too much money fielding complaints from restaurants having issues with non-compliant services.
Springer has argued in previous meetings that the services would find ways to recoup the fees, though the ordinance would prohibit companies from doing so by diminishing drivers’ pay.
Indeed, a DoorDash spokeswoman cautioned that a cap could do just that.
“DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and therefore fewer earning opportunities for Dashers,” she said in an emailed statement.
“Pricing regulations can also remove options available to restaurants by limiting their ability to opt-in to additional services to help their business. We remain focused on working with policymakers to reach solutions that better support restaurants, customers, and Dashers.”
Springer added on Tuesday that she was concerned an ordinance would take away control from businesses and customers.
“For someone to come into my business and say that [fee] percentage isn’t right and for it to potentially impact what somebody can charge and pay, I have difficulty with [it],” Springer said.
COUNCIL REVIEWS CANNABIS REPORT
After weeks of comments from both supports and opponents of local cannabis dispensaries, the City Council signaled this week that it was likely to lift the ban on the shops anytime soon.
The outcry from individuals both in and outside of Burbank — including more than two dozen calls during the City Council meeting — appeared to be in anticipation of a report the panel heard on Tuesday. The report, on the status of cannabis legalization and the potential tax income that could come from allowing dispensaries in the city, did not request specific direction.
Revenue estimates varied greatly according to the tax rate and the number of facilities allowed, though municipal staff members said conservative guesses ranged from $600,000 to more than $1 million per year.
But council members saw little reason to rush such a measure. City staff members pointed out that dispensaries are present in many surrounding areas, estimating that licensed retailers are within two miles of Burbank.
A tax on marijuana dispensaries would also need to be approved by the voters — likely a costly action, since Burbank would be required to hold the election concurrent with the county’s.
Additionally, department officials said they were already busy with other projects, and told the City Council that it would take at least 12 months to form a plan and collect further analysis.
Mayor Bob Frutos argued the panel needed to remain focused on economic recovery, suggesting the council reconsider the possibility of ordering research on allowing cannabis dispensaries during its goal-setting meeting next year.
“I’m just concerned, the way we’re going, we’re going to be spending more money to put a ballot measure when marijuana’s already being delivered in our neighborhoods and it’s protected by state law,” he said.