Type: Title:-
Committee(s) Assignment:
Ordinance
Amendment of Municipal Code Chapter 4-8 by adding new Section 4-8-300 to regulate third-party food delivery service fees
Joint Committee: Finance; License and Consumer Protection
SO2020- 5705
Chicago City Council, November 23, 2020
To the President and Members of the City Council:
Your Committee on License and Consumer Protection, having under consideration an ordinance introduced by Aldermen Waguespack, O'Shea, Mitts, Hopkins, Lopez, Moore, Rodriguez, Smith, Tabares, Reilly, Dowell, Cardona, Vasquez, Villegas, Sposato, Silverstein, Reboyras, Sawyer, Hairston, Thompson, Coleman, Sigcho-Lopez, Cappleman, Napolitano, Beale, Mitchell, Ervin, Burnett, Austin, Harris, Hadden, Gardiner, Maldonado, Scott, La Spata, Rodriguez Sanchez, Nugent, Garza, Martin, Tunney, Ramirez-Rosa, (which was referred on November 16, 2020):
An ordinance regulating the various fees charged to restaurants by third-party food delivery services,
begs leave to recommend that Your Honorable Body pass the ordinance which is transmitted herewith.
This recommendation was concurred in by members of the joint Committee on License and Finance on November 17, 2020.
Respectfully submitted.
EMMA MITTS SCOTT WAGUESPACK
CHAIRMAN, COMMITTEE ON CHAIRMAN,
LICENSE AND CONSUMER PROTECTION COMMITTEE ON FINANCE
Joint Committee on Finance and Committee on License and Consumer Protection
SUBSTITUTE ORDINANCE
WHEREAS, Beginning in late 2019, a new and highly communicable type of Coronavirus, now commonly known as COVID-19, emerged and began to spread rapidly. Despite efforts to contain COVID-19, it continues to spread throughout Chicago and the State of Illinois; and
WHEREAS, COVID-19 presents an extraordinarily severe and unprecedented threat to Chicagoans. It is necessary and appropriate for the City of Chicago ("City") to take immediate measures to protect the health, safety, and welfare of its residents; and
WHEREAS, On March 18, 2020, acting pursuant to Section 2-4-110 of the Municipal Code ("Code"), the Mayor declared that a state of emergency exists in Chicago and issued Emergency Executive Order No. 2020-1; and
WHEREAS, Since March 2020, restaurants have been closed, been limited to serving customers outdoors, or have been subjected to limits on indoor customer capacity, due to social distancing requirements; and
WHEREAS, While restaurants are closed or limited in their ability to utilize indoor premises at full capacity, they are highly reliant on third-party food delivery services; and
WHEREAS, Due to the high fees imposed by third-party food delivery services, many restaurants must increase food prices to stay in business, and Chicago residents who rely on food delivery may not be able to absorb increased food prices; and
WHEREAS, Many local restaurants being charged high fees struggle to remain financially viable. If these restaurants are forced to close, their workers will lose employment, which affects their ability to feed and shelter their families; and
WHEREAS, It is vital that the City's government continues to act swiftly and effectively to help and support our residents and employees during this public health emergency caused by COVID-19, including supporting and providing relief for the suffering business community within the City; and
WHEREAS, The City Council finds and declares that the immediate passage of this ordinance is urgent for the protection of the public health, safety and welfare; now, therefore,
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO: SECTION 1.
(a) Definitions.
For purposes of this ordinance, the following definitions apply: "City" means the City of Chicago.
"Delivery fee" means a fee charged by a Third-Party Food Delivery Service for providing a Food Dispensing Establishment with a service that delivers food and beverages from such establishment to customers. The term does not include any other fee or cost that may be charged by a Third-Party Food Delivery Service to a Food Dispensing Establishment, such as fees for listing or advertising the Food Dispensing Establishment on the Third-Party Food Delivery Service platform or fees related to processing the Online Order.
"Food Dispensing Establishment" has the same meaning as ascribed to this term in Section 4-8-010 of the Municipal Code of Chicago.
"Online Order" means an 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.
"Purchase Price" means the price, as listed on'the menu ofthe Food Dispensing Establishment, for the items contained in an Online Order, minus any applicable coupon or promotional discount provided to the customer by the Food Dispensing Establishment through the Third-Party Food Delivery Service. This definition does not include taxes, gratuities, and any other fees or costs that may make up the total amount charged to the customer of an Online Order.
"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 delivery or pick-up of food and beverages from, no fewer than 20 Food Dispensing Establishments located in the City that are each owned and operated by different persons.
|1010|
(b) Prohibitions
(T) It shall be unlawful for a Third-Party Food Delivery Service to charge a Food Dispensing Establishment a Delivery Fee that totals more than 10 percent of the Purchase Price of each Online Order on an individual or cumulative basis.
It shall be unlawful for a Third-Party Food Delivery Service to charge a Food Dispensing Establishment any amount designated as a Delivery Fee for an Online Order that does not involve the delivery of food or beverages.
It shall be unlawful for a Third-Party Food Delivery Service to charge a Food Dispensing Establishment any combination of fees, commissions, or costs for the Food Dispensing Establishment's use of the Third-Party Food Delivery Service that is greater than 15 percent of the Food Dispensing Establishment's monthly net sales processed through the Third-Party Delivery Service. For purposes of this subsection (b)(3), the term "fees, commissions, or costs" includes Delivery Fees.
It shall be unlawful for a Third-Party Food Delivery Service to charge a Food Dispensing Establishment any fee, commission, or cost other than as permitted in Subsections 1 through 3, above.
It shall be unlawful for a Third-Party Food Delivery Service to charge a customer any Purchase Price for a food or beverage item that is higher than the price set by the Food Dispensing Establishment on the Third-Party Food Delivery Service or, if no price is set by the Food Dispensing Establishment on the Third-Party Food Delivery Service, the price listed on the Food Dispensing Establishment's own menu.
It shall be unlawful for a Third-Party Food Delivery service to reduce the compensation rates paid to the Third-Party Delivery Service drivers, or to garnish gratuities, as a result of any fee limitations instituted by this section.
(c) Enforcement and Rules.
(1) The Commissioner of Business Affairs and Consumer Protection is authorized to (i) administer and enforce this ordinance, and (ii) promulgate rules necessary or useful to assist in the implementation and administration of this ordinance.
|1010|(d) Violation - Penalty.
Any person who violates any provision of this section shall be fined not less than $1,000.00 nor more than $2,000.00 for each offense. Bach day that a violation continues shall constitute a separate and distinct offense.
SECTION 2. This ordinance shall not apply to any Chain Restaurant. For purposes of this ordinance only, the term "Chain Restaurant" means any group of businesses licensed as a Food Dispensing Establishment in the City with ten or more locations and operating under a common business name.
SECTION 3. In light of the urgent need to ensure the proper regulation of Third-Party Delivery Service fees imposed upon Food Dispensing Establishments during the public health emergency caused by COVID-19, pursuant to 65 ILCS 5/1-2-4, this ordinance shall take effect immediately upon its passage and approval, if such passage is by a vote of at least two-thirds of the members of this Council. In the event this ordinance passes by a majority vote of less than two-thirds of the members of this Council, it shall take effect ten days after passage and publication.
Alderman Scott Waguespack - 32nd Ward
Alderman Matthew O'Shea - 19th Ward
This ordinance shall be repealed of its own accord, without further action of the City Council when indoor dining in food dispensing establishments is allowed at forty percent or greater capacity in the City for 60 consecutive days.
CITY OF CHICAGO
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
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02020-5705
Amendment of Municipal Code Chapter 4-8 by adding new Section 4-8-300 to regulate third-party food delivery service fees
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121 NORTH LASALLE STREET, ROOM 107. CHICAGO, ILLINOIS 60602
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Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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121 NORTH LASALLE STREET, ROOM 107, CHICAGO. ILLINOIS 60602
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OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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121 NORTH LASALLE STREET. ROOM 107. CHICAGO. ILLINOIS 60602
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OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Chicago City Council Co-Sponsor Form
02020-5705
Subject: An ordinance regulating the various fees charged to restaurants by
third-party food delivery services
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Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Chicago City Council Co-Sponsor Form
02020-6705
Subject lAjrneodment of Municipal Code Chapter 4-3 by adding Srction4-8-300 to regulate irhu-d-party delivery service fees
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Chicago City Council Co-Sponsor Form
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Substitute ordinance regulating Third-Party Food Delivery Service fees.
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121 NORTH LASALLE STREET, ROOM 107, CHICAGO, ILLINOIS 60602
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SO2020-5705
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121 NORTH LASALLE STREET, ROOM 107, CHICAGO, ILLINOIS 60602
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Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Chicago City Council Co-Sponsor Form
SO2020-5705
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Chicago City Council Co-Sponsor Form
SO2020-5705
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Substitute ordinance regulating Third-Party Food Delivery Service fees.
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SO2020-5705
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Substitute ordinance regulating Third-Party Food Delivery Service fees.
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Substitute ordinance regulating Third-Party Food Delivery Service fees.
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OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Sut). ct. [Amendment of Municipal Code 4-8 by adding new Section 4-8-300 to regulate third-party " Ifood delivery service fees
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CITY OF CHICAGO
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OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating .Third-Party Food-Delivery Service fees.
Adding Co-Spoiisor(s)
jLj.
Susan .Sadlowski Garza.
10th
Please ADD Co-Sponsor(s) Sho wn Below - (Principal Sponsor's Consent Required)
.(
(Signature)
(Signature)
Ward)
\ Iward)
Date Filed: 11/23/20
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
.(l I Ward) fl I Ward)
Date Filed:
Final Copies To Be Filed With:. • Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLESTREET, ROOM 107. CHICAGO, ILL I NOIS 60602
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s) Shown Below-(Principal Sponsor's Consent Required)
(I I Ward)
(Signature)
Date Filed: 11/23/2020
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
fl I Ward) (I I Ward)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLE STREET. ROOM 107, CHICAGO, ILLINOIS 60602
CITY OF CHICAGO
*
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Amendment of Municipal Code Chapter 4-8 by adding new Section 4-8-300 to regulate third-party food delivery service fees
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s) Shown Below-(Principal Sponsor's Consent Required)
Ward) Ward)
Principal Sponsor:.
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
Alderman
(Signature)
(\ I Ward)
(Signature)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLE STREET, ROOM 107, CHICAGO, ILLINOIS 60602
CITY OF CHICAGO
-
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s) Shown Below-(Principal Sponsor's Consent Required)
Alderman
(Signature)
Carlos Ramirez-Rosa
(Signature)
Principal Sponsor:
Alderman
Date Filed:
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below- (Principal Sponsor's Consent NOT Required)
.(LZHward)
(Signature)
Alderman
(Signature)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLE STREET. ROOM 107, CHICAGO, ILLINOIS 60602
CITY OF CHICAGO
™ *
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Subject:
Adding Co-Sponsor(s)
t., Please ADD Co-Spfnsor(s) Shown Below - (Principal Sponsor's Consent Required)
Alderman
Scott Jr
(Signature)
Principal Sponsor:.
(Signature)
Removing Co-Sponsor(s) PleaseREMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
.(LZZIward) (\ I Ward)
Date Filed:
Final Copies To Be Filed With: * Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLE STREET. ROOM 107. CHICAGO, ILLINOIS 60602
CITY OF CHICAGO
OFFICE OF- THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s)Shown Below - (Principal Sponsor's Consent Required)
(Signature)
Principal Sponsor:
(Signature)
Removing Co-SponspKs) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
A IWarHY
.(I IWard)
(Signature)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred
• CityClerk
121 NORTH LASALLE STREET. ROOM 107, CHICAGO, ILLINOIS 60602
Mail - Armin Luna - Outlook
CITY OP CHICAGO
-—: ¦—
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s) Shown Below - (Principal Sponsor's Consent Required)
Ward)
J33
(Signature)
Alderman . d I Ward)
(Signature) .
Date Filed: 11/23/2020 Principal Sponsor: . v_ .
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
Alderman rl I Ward)
(Signature)
Alderman . : fl I Ward)
(Signature)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred'
• City Clerk
121 NORTH LASALLE STREET. ROOM 107. CHICAGO. ILLINOIS 60602
11 /24/2020 Mail - Armin Luna - Outlook
errY OF CHICAGO
OFFICE. OF THE' CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
Document No Subject:
Adding Co-Sponss6r<$)
Please ADQ CorSponsor(s) Shown Below - (Principal Sponsor's Consent Required)
Alderrnar
'.(Signature)
Alderman
(Signature).
Date Filed: . Principal Sponsor:
Ward) Ward)
(Signature)
Removing 'Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below¦.- (Principal Sponsor's Consent NOTRequired)
Alderman : - fl Iward)
(Signature)
Alderman fl I Ward)
(Signature)
Date Filed: ¦ • -
j . Final Copies To Be Filed With: • Chairman of Committee to which legislation .was referred
I • City Clerk
121 NORTH-LASALUE 5IREE1. KOOM.107, CHICAGO. ILLINOIS 60603
1/2
CITY OF CHICAGO
*
OFFICE OF THE CITY CLERK ANNA M. VALENCIA
Chicago City Council Co-Sponsor Form
SO2020-5705
Substitute ordinance regulating Third-Party Food Delivery Service fees.
Adding Co-Sponsor(s)
Please ADD Co-Sponsor(s) Shown Below-(Principal Sponsor's Consent Required)
Carrie M. Austin 34
Alderman (I IWard)
(Signature)
Alderman
(Signature)
Date Filed: Principal Sponsor:
(Signature)
Removing Co-Sponsor(s) Please REMOVE Co-Sponsor(s) Below - (Principal Sponsor's Consent NOT Required)
Alderman ; (I I Ward)
(Signature)
Alderman fl I Ward)
(Signature)
Date Filed:
Final Copies To Be Filed With: • Chairman of Committee to which legislation was referred
• City Clerk
121 NORTH LASALLE STREET, ROOM 107, CHICAGO, ILLINOIS 60602
Approved