City of Santa Clara
MenuThird-Party Food Delivery Fee Cap
At the Tuesday, Sept. 1 meeting, the City Council approved a temporary ordinance that caps fees at 15% that a third-party delivery service can charge Santa Clara restaurants for their services during the COVID-19 pandemic. The ordinance is in response to sharp revenue declines experienced by local restaurants during the COVID-19 pandemic after being forced to close indoor dining and now rely on limited outdoor dining, pickup, and third-party applications to deliver takeout.
The City’s ordinance also prevents delivery companies from shifting costs by retaining any portion of a driver’s gratuities. In addition, third-party delivery services are now required to disclose the fees charged to app users, gratuities paid, and any discounts offered by the restaurants.
The ordinance will remain in effect until the end of the COVID-19 local emergency.
*The ordinance does not prohibit the third-party food delivery service companies from charging additional fees to consumers. As a result, some third-party food delivery service companies have imposed a $2 legislative fee (shown on receipts as a “Santa Clara Fee”), that is paid by the consumer. Similar fees are also being imposed in other cities (both locally and nationally) that have adopted similar delivery cap ordinances.
Santa Clara County Third-Party Food Delivery Fee Cap
On December 15, 2020, the Santa Clara County Board of Supervisors also took steps to cap third-party food delivery service fees across all cities in the county. The County’s ordinance supersedes the City’s ordinance, except where the City’s ordinance is more restrictive. The more restrictive ordinance shall apply in place of the County’s ordinance within the Santa Clara city limits.
View the Summary Outline of Both Ordinances