Denver City Council is considering capping the fees that delivery companies can impose on restaurants as the coronavirus continues to affect the industry.

Due to decreased capacity and social distancing requirements, restaurants are able to serve far fewer customers in-house than they did before the pandemic, and they have relied on delivery to make up for lost revenue.

However, many have to rely on third-party vendors like Grubhub, DoorDash and Postmates, who can bill restaurants up to 40% of their total bill, Councilor Kendra Black said during a committee meeting earlier this month. Their proposal would limit this commission fee to 15% to help restaurants in trouble regain some of their lost profit margin.

“That will bring immediate relief,” said Mike McKibbin, district manager of Brothers BBQ, a local chain with eight subway locations in Denver. “And of course it would allow us to do things that can only help our business grow and keep employees.”

Cities like San Francisco, Seattle, and New York City have taken similar action, capping commission fees to 15% to 20%. Grubhub has pushed back, applied to end these upper limits and even to oppose the new regulations at times.

Grubhub is also against the caps in Denver, said spokeswoman Katie Norris.

“We believe fee caps are the wrong way to support restaurants because they negatively affect restaurant order volumes and increase costs for diners,” she said.

The council will cast its first of two votes on the price cap on Monday.

Relief can’t come soon enough, McKibbin said, because patios are gradually closing or customers are less likely to want to eat outside when the weather gets cooler, which makes delivery orders all the more important. He estimated that about a quarter of his restaurants’ business is done through these third party vendors, and that will increase over the winter.

At Leven Deli Co. in Capitol Hill, third-party delivery did about 10% of the business when the pandemic first hit, said owner Anthony Lygizos. He said these big corporations are not the enemy, but they do create an expensive go-between between customers and restaurants like his.

“There is no pride; there is no worry; There is no training, ”said Lygizos. “I understand everyone needs a job, but you’re just breaking that buffer.”

Lygizos said it increased some of its prices when customers order through third-party vendors to offset the expensive fees. A price cap would mean fewer costs will have to be passed on to customers in the future, he said.

  • Andy Cross, the Denver Post

    Leven Deli Co. owner Anthony Lygizos, Center, speaks to customers during a wine tasting session at the deli on September 25, 2020.

  • Andy Cross, the Denver Post

    Leven Deli Co. customers, Becca Deal (center) and Tori Logan (right) order lunch from Celestine Lopez (left) in the Deli’s to-go and terrace formulation window on September 25, 2020.

  • Andy Cross, the Denver Post

    Leven Deli Co. customers enjoy lunch and great weather at picnic tables in the deli on September 25, 2020.

  • Andy Cross, the Denver Post

    Leven Deli Co. owner Anthony Lygizos (right) speaks to customer Evelyn Zilberman (left) while wine merchant Matt Armitage (center) presents a new bottle during a wine tasting at the deli on September 25, 2020.

Chris Fuselier, owner of Blake Street Tavern, 2301 Blake St., said delivery companies may be able to make up for lost revenue from increasing volumes.

Fuselier said he terminated his partnerships with third parties prior to the outbreak of the pandemic because they were too expensive. If the council approves the price cap, it will likely enroll again.

The fees hit local family businesses the hardest, said Fuselier. Chain restaurants often have enough leverage to negotiate lower prices with third-party delivery companies, but smaller restaurants do not.