L.A. Caps Grubhub, Postmates, Other Delivery Apps Service Charges At 15%

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

grubhub, uber eats, doordash, postmates

The Los Angeles City Council capped service charges third-party delivery services like Postmates, Grubhub, Uber Eats can pass on to restaurants at 15% of the purchase price during the pandemic following similar moves in San Francisco, Seattle and other major cities.

Restaurants have long complained about charges from the popular apps as high as 30% are eating away at their business, and those worries have grown during the pandemic, as owners find themselves relying more heavily on the services.


Even as dine-in restaurants slowly reopen, many are still devastated by the months-long closure. During that time, those that managed to stay afloat could only offer customers carry out and pick up services in order to keep business alive.

"Any arbitrary cap – regardless of the duration – will lower order volume to locally-owned restaurants, increase costs for small business owners, and raise costs on customers. Delivery workers would have fewer work opportunities and lower earnings," said Jenna DeMarco, a spokesperson for GrubHub in an email. "We also believe that any cap on fees represents an overstep by local officials and would not withstand a legal challenge."

Chris Webb, the CEO of ChowNow, an online order platform that offers restaurants a flat fee, said restauranteurs have long been frustrated with the fees.

"What we are hearing from a lot of restaurants," he said. "' We cannot afford to stay in business and take around 30% commissions consistently. It's driving us out of business and now this (pandemic) is the motivator for us to move.'"

He said he saw business skyrocket as many restaurant owners shifted away from delivery services that relied on percentage-based fees and to his flat-fee model. Webb said he was signing up as many as 2,000 restaurants a month.

The effort to cap the services was driven in part by pressure from the United Food and Commercial Worker Union Local 770, which is organizing the drivers. The order, which must still be signed by Mayor Eric Garcetti, also prevents the apps from taking tips from drivers.

"This smart policy will prohibit these companies from taking tips from drivers and gouging restaurants with fees," said John Grant, president of UFCW 770 in a statement."Food delivery drivers are essential workers who provide meals for the residents of our City, especially to seniors and others who are sheltering at home or under quarantine."

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Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage

Keerthi Vedantam

Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage
Courtesy of Greater Good Health

The pandemic highlighted what’s been a growing trend for years: Medical students are prioritizing high-paying specialty fields over primary care, leading to a shortage of primary care doctors who take care of a patient’s day-to-day health concerns. These physicians are a cornerstone of preventative health care, which when addressed can lower health care costs for patients, insurers and the government. But there’s a massive shortage of doctors all over the country, and the pipeline for primary care physicians is even weaker.

One local startup is offering a possible answer to this supply squeeze: nurse practitioners.

On Wednesday, Manhattan Beach-based Greater Good Health unveiled a $10 million Series A funding round led by LRVHealth, which adds to the startup’s $3 million seed round last year. The company employs nurse practitioners and pairs them with doctor’s offices and medical clinics; this allows nurse practitioners to take on patients who would otherwise have to wait weeks, or even months, to see a doctor.

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Minnie Ingersoll
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PLUS Capital​’s Amanda Groves.
Courtesy of Amanda Groves.

On this episode of the L.A. Venture podcast, Amanda Groves talks about how PLUS Capital advises celebrity investors and why more high-profile individuals are choosing to invest instead of endorse.

As a partner at PLUS, Groves works with over 70 artists and athletes, helping to guide their investment strategies. PLUS advises their talent roster to combine their financial capital with their social capital and focus on five investment areas: the future of work, future of education, health and wellness, the conscious consumer and sustainability.

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David Shultz

David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.

Rivian Stock Roller Coaster Continues as Amazon Van Delivery Faces Delays
Courtesy of Rivian.

Rivian’s stock lost 7% yesterday on the back of news that the company could face delays in fulfilling Amazon’s order for a fleet of electric delivery vans due to legal issues with a supplier. The electric vehicle maker is suing Commercial Vehicle Group (CVG) over a pricing dispute related to the seats that the supplier promised, according to the Wall Street Journal.

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