HomeMy WebLinkAbout2378 ORDINANCE NO. 2378
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA ESTABLISHING A TEMPORARY LIMIT ON THE
COMMISSION FEES CHARGED BY THIRD-PARTY FOOD DELIVERY
APPLICATIONS ON BUSINESSES IN ARCADIA
WHEREAS, On March 4, 2020, the Health Officer of Los Angeles County
determined that there is an imminent and proximate threat to the public health from the
introduction of COVID-19 in Los Angeles County and declared a Local Health Emergency
and the Los Angeles County Board of Supervisors concurrently proclaimed the existence
of a local emergency for the County of Los Angeles; and
WHEREAS, on March 4, 2020, California Governor Gavin Newsom declared a
State of Emergency due to the spread and effects of COVID-19; and
WHEREAS, On March 17, 2020, the City Council of the City of Arcadia ("City
Council") adopted Resolution 7300, ratifying the City Manager's proclamation of a local
emergency and declaring a local emergency; and
WHEREAS, these and subsequent actions by the State of California and the
County of Los Angeles Department of Public Health in response to the COVID-19
pandemic have prohibited or limited indoor and on-site dining at retail food establishments
in the City of Arcadia, which has led to a substantial increase in the use of third-party food
delivery applications; and
WHEREAS, the County of Los Angeles has established a temporary limitation on
the commission fees charged by third-party food delivery applications on businesses, as
have numerous individual cities in the County of Los Angeles, until such time that the
COVID-19 emergency has subsided and restaurants are permitted to resume on-site
dining without restrictions; and
WHEREAS, at their March 16, 2021, regular meeting, the Arcadia City Council
carefully reviewed and considered potential adoption of a limitation on the commission
fees charged by third-party food delivery applications, and directed City Staff to prepare
an ordinance limiting commission fees charged to restaurants for immediate adoption;
and
WHEREAS, pursuant to Government Code Section 8634 and Arcadia Municipal
Code Section 2213.3.1, the City Council may make and issue rules and regulations on
matters reasonably related to the protection of life and property as affected by such
disaster.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES ORDAIN AS FOLLOWS:
SECTION 1. The recitals set forth above are true and correct and are hereby
adopted as findings in support of this Ordinance as if fully set forth herein.
SECTION 2. TEMPORARY LIMIT ON THE COMMISSION FEES CHARGED BY
THIRD-PARTY FOOD DELIVERY APPLICATIONS ON BUSINESSES IN ARCADIA.
1. Definitions. For purposes of this Ordinance, the following definitions apply:
a. "City" means the City of Arcadia.
b. "Customer" means any person, firm, or association who makes use of a
third-party food delivery applications for the purpose of obtaining food from
a restaurant.
c. "Delivery fee" means a fee charged by a third-party food delivery service for
providing a food service establishment with a service that delivers food from
such establishment to customers. The term does not include any other fee
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that may be charged by a third-party food delivery service to a food service
establishment, such as fees for listing or advertising the food service
establishment on the third-party food delivery service platform or fees
related to processing the online order, including but not limited to, service
fees, fees for facilitating customer pick-up, and credit card processing fees.
d. "Food" means all articles and substances used for food and drink,
confectionary or condiment whether simple or compound, and all
ingredients and components used in the preparation thereof.
e. "Online Order" means any order placed by a customer through or with the
assistance of a platform provided by a third-party food delivery service,
including a telephone order, for delivery or pick-up within the City.
f. "Purchase price" means the total price of the items contained in an online
order that are listed on the menu of the food service establishment where
such order is placed. Such term does not include taxes, gratuities and any
other fees that may make up the total cost to the customer of an online
order.
g. "Restaurant" means and includes any restaurant, as that term is used in
Section 9109.01.060 of the City of Arcadia's Development Code.
h. "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 20 food service establishments
located in the city that are owned and operated by different persons.
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i. "Worker" means any person working for a third-party food delivery service.
2. Fee Limits. It shall be unlawful for a third-party food delivery service to charge a
restaurant:
a. Any combination of fees, commissions, or costs, inclusive of delivery fees,
that total more than 20 percent of the purchase price of each online order.
b. Any individual delivery fee that totals more than 15 percent of the purchase
price of an online order;
c. Any fee, commission, or cost other than as permitted in subdivisions (a) and
(b), above are prohibited.
3. Reporting of Fees. Third-party food delivery service shall disclose to the customer
an accurate, clearly identified, and itemized cost breakdown of each transaction,
including, but not limited to, the following:
a. The purchase price of the food and beverages at the cost listed on the
restaurant's menu;
b. Each and every fee, commission, or cost charged to the restaurant,
including any delivery fee.
c. Each and every fee, commission, or cost charged to the customer by the
third-party food delivery service; and
d. Any tip or gratuity that will be paid to the person delivering the food or
beverages.
e. None of the fees, commissions, or costs in subdivisions (a) through (d)
above, may be combined together.
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4. Protection of Gratuities. It shall be unlawful for a third-party food delivery service
to reduce the compensation, including any tip or gratuity, paid to any workers as a
result of the prohibitions in this Ordinance. Any tip or gratuity shall be paid by the
third-party food delivery service, in its entirety, to the person delivering the food or
beverages.
5. Grace Period. A third-party food delivery service shall not be found in violation of
this Ordinance for the first seven days after its effective date, if it imposes a fee in
excess of the fee limit in Section 2, provided it refunds the excess fee to the
restaurant no later than 14 days.
6. Restaurant Opt-Out. Restaurants shall have the option to opt-out of the enacted
limitations on third-party food delivery commission fees and engage with third-party
food delivery service providers according to their own preferences. For purposes
of enforcement, upon City request, written confirmation that a restaurant has
chosen to opt-out of the adopted requirements shall be provided to the City by said
restaurant and/or third-party food delivery service within 14 days.
7. Penalties and Enforcement.
a. In addition to any other legal remedies, if a third-party food delivery service
charges a restaurant fees that violate this Ordinance, the restaurant shall
provide written notice to the third-party food delivery service requesting a
refund within seven days. If the third-party food delivery service does not
provide the refund requested after seven days or the third-party food
delivery service continues to charge fees in violation of this Ordinance after
the 4 initial notice and seven-day cure period, a restaurant may enforce this
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Ordinance 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.
b. Violations under this Ordinance shall accrue on a daily basis for each day
and for each restaurant charged a fee in violation of this Ordinance.
8. Term. This Ordinance shall become effective immediately, and shall terminate 90
days after the County of Los Angeles Public Health Officer allows restaurants to
offer dine-in services, without limitation, or upon the termination of the COVID-19
local emergency, whichever comes first.
SECTION 3. Severability. If any section, subsection, subdivision, paragraph,
sentence, clause or phrase of this Ordinance, or any part thereof is for any reason held
to be unconstitutional or otherwise legally ineffective, such decision shall not affect the
validity of the remaining portion of this Ordinance or any part thereof. The City Council
hereby declares that it would have passed each section, subsection, subdivision,
paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or
more section, subsection, subdivision, paragraph, sentence, clause or phrase be
declared unconstitutional or otherwise legally ineffective.
If for any reason any portion of this Ordinance is found to be invalid by a court of
competent jurisdiction, the balance of this ordinance shall not be affected.
SECTION 4. CEQA. The City Council finds that this Ordinance is not subject to
the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the
activity will not result in a direct or reasonably foreseeable indirect physical change in the
environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378)
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of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it
has no potential for resulting in physical change to the environment, directly or indirectly.
SECTION 5. The City Clerk shall certify to the adoption of this Ordinance and shall
cause a copy of same to be published in the official newspaper of said City within fifteen
(15) days after its adoption. This Ordinance shall take effect on the thirty-first (31St) day
after its adoption.
Passed, approved and adopted this 6th day of April, 2021.
Mayor of the City of Arcadia
ATTEST:
o lerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF ARCADIA )
I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the
foregoing Ordinance No. 2378 was passed and adopted by the City Council of the City of
Arcadia, signed by the Mayor and attested to by the City Clerk at a special meeting of said
Council held on the 6th day of April, 2021 and that said Urgency Ordinance was adopted by
the following vote, to wit:
AYES: Beck, Cheng, Verlato, Tay, and Chandler
NOES: None
ABSENT: None
Clerk of e City of Arcadia
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