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BACKGROUND On March 16, 2020, Alameda County issued its first Shelter in Place Public Health Order to stop the spread of COVID-19; on March 17, 2020, the City of Pleasanton declared a local emergency. The County's action immediately limited all restaurants to take-out and delivery only, which substantially impacted income and thus the ability to pay for operating and staffing expenses. Prior to COVID-19, most restaurants that focused their operating model on in-person dining did not have the needed infrastructure to support a delivery service model that became essential once the shutdown was imposed. The availability of third -party food delivery services has helped to fill that gap although at a significant cost to the restaurants, in some cases up to 30 percent of the purchase price of the items ordered. For restaurants that already operate with slight profit margins, these costs are challenging to absorb. Further, restaurants have limited bargaining power to negotiate lower fees with third -party platforms, and state anti -gouging laws do not provide protection for such food delivery services. DISCUSSION The City has heard from local restaurateurs who have confirmed increasing delivery fees from third -party food delivery companies during COVID-19 emergency. Capping food delivery service fees at 15 percent per order will help to ensure the continued operation of local restaurants and retain reasonable delivery service income for third - party platforms during the local emergency. The 15 percent cap is based on the experience of other California cities that have already adopted fee ceilings or similar caps as a reasonable emergency regulation. The urgency ordinance also prohibits a third -party food delivery service from reducing the compensation, including any tip or gratuity, paid to any of its workers or the restaurant because of the cap. If a restaurant or food delivery service worker alleges that a delivery service provider has violated the urgency ordinance, the urgency ordinance requires that a notice of alleged violation be given to the food delivery service provider who will have seven calendar days to cure any alleged violations (such as issuing a refund or adjusting its mobile applications for ordering). Should this written notice fail to cure the violation, the individual or restaurant would have the ability to file a civil action in court to seek damages or injunctive relief to stop the violation from continuing to occur. Following adoption by at least a four-fifths vote of the City Council, the urgency ordinance will go into effect and be enforced immediately, and will remain in effect until an expiration date of one year from the effective date, or upon termination of the local state of emergency, whichever occurs first; or as otherwise terminated, modified, or extended by the City Council. Page 2 of 3