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HomeMy WebLinkAbout2084ORDINANCE NO. 2084 AN ORDINANCE OF THE CITY OF PALM SPRINGS, CALIFORNIA, ADDING CHAPTER 5.89 TO THE PALM SPRING MUNICIPAL CODE, REGARDING LIMITATIONS ON THIRD -PARTY FOOD DELIVERY FEES City Attorney Summary An. ordinance adding Chapter 5.89 to Title 5 of the Palm Springs Municipal Code, which permanently extends the limit on the charges imposed by third -party delivery services on retail food establishments. The Council finds that these provisions will continue to promote the use of third -party delivery services by making them more affordable to City residents, and protect City residents, visitors, third party delivery workers and local businesses from the imposition of excessive fees. WHEREAS, the City of Palm Springs is a charter city organized pursuant to Article XI, Section 5 of the California Constitution and pursuant to the authority so granted, the City has the power to make and enforce within its limits all ordinances and regulations with respect to municipal affairs not in conflict with its own charter. WHEREAS, with that purpose and intent, on March 14, 2020, the City Manager acting as Director of Emergency Services issued a Proclamation of Local Emergency in response to the ongoing COVID-19 pandemic that was ratified by the City Council on March 19, 2020. WHEREAS, under the initial stay at home orders issued by the State in March of 2020, restaurants were prohibited from providing -in -person dining, and were limited to drive through, pick-up or delivery. Although restaurants were subsequently authorized to provide in -person, indoor dining on May 12, 2020, that option was again removed by the State on July 1. After that date, restaurants within Palm Springs were only able to provide in -person dining outdoors. As a result of the limitations placed on restaurants being able to provide in -person dining, there had been a significant increase in the use of third -parry food delivery services, and reports of high delivery fees, which had the effect of discouraging the use of third party delivery services. WHEREAS, in response to this increase in demand of third -party food delivery services, on October 8, 2020, the City Council enacted Urgency Ordinance No. 2033, which temporarily placed a limit on the charges imposed by third -party delivery services on retail food establishments in an effort to promote the use of these delivery services and protect both City residents and local businesses from excessively high fees. WHEREAS, when Urgency Ordinance No. 2033 was enacted, it was set to automatically sunset 90 days following the end of the locally declared emergency, unless extended by the City Council or Emergency Services Director. 55575.18100\41694915.1 Ordinance No. 2084 Page 2 WHEREAS, during its regular meeting on February 21, 2023, the City Council declared an end to the locally, declared emergency in response to the COVID-19 pandemic, effective February 28, 2023. WHEREAS, as a result of the City Council ending the locally declared emergency, Urgency Ordinance No. 2033 is set to automatically sunset and expire on May 28, 2023. WHEREAS, upon further review and consideration, the City Council has determined that permanently extending the limit on the charges imposed by third -party delivery services on retail food establishments would continue to be beneficial to both City residents, visitors, third party delivery workers and local businesses by protecting against the negative economic impacts associated with the imposition of excessive service delivery fees, as well as protecting the ability of those providing service deliveries to receive tips, while at the same time promoting the use of these third -party delivery services. WHEREAS, these new regulations shall be codified in Chapter 5.89 and added to Title 5 of the Palm Springs Municipal Code. THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES ORDAIN AS FOLLOWS: SECTION 1. Incorporation of Recitals. That the findings and determinations reflected above are true and correct, and are incorporated by this reference herein as the cause and foundation for the action taken by and through this Ordinance. The City Council hereby finds that this Ordinance is necessary for the continued protection of City residents and local businesses from the economic impacts associated with the imposing of excessive fees by third -party food delivery services. SECTION 2. Regulation of Third Party Food Delivery Service Fees. The Palm Springs Municipal Code shall be amended to add a new Chapter 5.89, to read as follows: "Chapter 5.89 5.89.010 5.89.020 5.89.030 5.89.040 Regulation of Third Party Food Delivery Charges Definitions Regulations. Disclosures. Enforcement. I 1 55575.18100\41694915.1 Ordinance No. 2084 Page 3 5.89.010 Definitions. For purposes of this ordinance,, the following definitions apply -.- A. "City" means the City. of Palm Springs. B. "Core delivery service" means a service that lists a Retail Food Establishment and makes the Retail Food Establishment discoverable on all modalities or.platforms offered by a third -party. meal delivery platform, including any website, mobile application, or other internet service where a third -party meal delivery platform lists Retail Food Establishments and facilitates or performs the delivery through employees or independent contractors of the third -party meal delivery platform of food or beverages from Retail Food Establishments to customers-. The term "core delivery service" does not include any other service that may be provided by a third - party meal delivery platform to a Retail Food ,Establishment, including advertising or other promotional, services, search engine optimization, business consulting, or credit card processing. C. "Delivery Fee" means, a fee charged by a Third -party Food Delivery Service for providing a Retail Food 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.Retail Food Establishment, such as fees for listing or advertising the Retail Food -Establishment on the Third - party Food Delivery Service platform or fees related to processing the online order, including, but not limited to, service fees, fees for facilitating Online Orders for pick-up, and credit card processing fees. D. "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. E. "Purchase Price" means the price, as listed on the menu, for the items contained in an Online *Order, minus any applicable coupon or promotional discount provided to the customer by the Retail Food 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 F. "Retail Food Establishment" means a restaurant, delicatessen bakery, coffee shop, or other eat -in or carry -out service of processed or prepared and ready -to -eat food or beverages. G: "Third -party Food Delivery Service" means any website, 55575.18100\41694915.1 Ordinance No. 2084 Page 4 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 Retail Food Establishments located in the City that are each owned and operated by different persons. 5.89.020 Regulations. A. It shall be, unlawful for a Third -party Food Delivery Service to charge a Retail Food Establishment a Delivery Fee that totals more than fifteen (15) percent of the Purchase Price of each Online Order. The fee limits in this subsection A and subsection C shall not apply to a third -party meal delivery platform that: (1) Offers all Retail Food Establishments the option to obtain core delivery service for a total fee, commission, or charge that is no more than 15% of the purchase price of the online order, without requiring the purchase of additional services; and (2) Within 30 days following the effective date of this ordinance, notifies all Retail Food Establishments that have an existing agreement with the third -party meal delivery platform of the option described in paragraph (1) of this subsection. B. It shall be unlawful for a Third -party Food Delivery Service to , charge a Retail Food Establishment any amount designated as a Delivery Fee for an Online Order that does not involve the delivery of food or beverages, or both. C. It shall be unlawful for a Third -party Food Delivery Service to charge a Retail Food Establishment any combination of fees, commissions, or costs for the Retail Food Establishment's use of the Third -party Food Delivery Service that is greater than five (5) percent of the Purchase Price of each Online Order. Fees, commissions, or costs do not include Delivery Fee D. It shall be unlawful for a Third -party Food Delivery'Service to charge a Retail Food Establishment any fee, commission, or cost that is to be paid to the Third -party Food Delivery Service, other,than as permitted in Subsections A through C, above. E. 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 Retail Food Establishment on the Third - Party Food Delivery Service or, if no price is set by the Retail Food Establishment on the Third -Party Food Delivery Service, the price listed on the Retail Food Establishment's own menu. 55575.18100\41694915.1 Ordinance No. 2084 Page 5 F. It shallbe unlawful for a, Third -party Food Delivery service to retain any portion of amounts designated as a, tip or gratuity. Any tip or gratuity shall be paid by the Third -party Delivery Service, in its entirety, to the person delivering the food or beverages. G. As an example, except as provided for in subsection A of this Section 5.89.020, if a customer orders a meal that is advertised for $10.00 on the Third -party Food Delivery Service's app., the Third -party Food Delivery Service cannot charge the customer more than $10.00 for the. meal. Nor can the Third -party Food Delivery Service charge the restaurant more than $1.50 as a Delivery Fee. Nor can the Third -party Food Delivery Service charge the restaurant more than 500 as a fee or commission for the restaurant's placement -on the -Third -party Food Delivery Service's app. Finally, if the customer agrees to provide the delivery -person a $2.00 tip, that tip must go to the delivery person; not the Third -party Food Delivery Service company..' 5.89.030 Disclosures. , The Third -party Food Delivery .Service shall disclose to the customer an accurate, clearly identified, and 'itemized cost breakdown of each transaction, including, but not limited to the following: . (a) the Purchase Price of the food and beverages at the cost listed on the Retail Food Establishment's menu; (b) the Delivery Fee charged to the Retail Food Establishment; (c) each fee, commission, or cost, other than a Delivery Fee, charged to the Retail Food Establishment; (d) each fee, commission, or cost, other than the Delivery Fee or the Purchase Price of the food, charged to the customer -by the Third -party Food Delivery Service; and (e) any tip or gratuity that will be paid to the person delivering the food or beverages. 5.89.040 Enforcement. A violation of this ordinance shall subject the violator to the following: 1 A. A civil action in the Superior Court of the State of California to recover all actual damages resulting from a violation of this ordinance. 55575.18100\41694915.1 Ordinance No. 2084 Page 6 B. Reasonable attorneys' fees and costs awarded by a court to a plaintiff that prevails in an action against a Third -party Food Delivery Service. If plaintiff fails to prevail against a Third -party Food Delivery Service, a court may award reasonable attorneys' fees and costs to the Third -party Food Delivery Service upon a determination by the court that the plaintiffs action was frivolous. C. � A civil .action alleging a. violation of any provision of this ordinance shall commence only after the following requirements have been met: 1. . Written notice is provided to the Third -party Food Delivery Service of the. provisions of the ordinance alleged to have been violated and the facts to support the alleged violation; and 2. The`Third-party Food Delivery Service is provided 15 days from the date of the written notice to cure any alleged violation. D. Notwithstanding any provision of this Code,, or any other ordinance to the contrary, no criminal penalties shall attach for violation of this ordinance, nor shall it be enforced as a violation of a City ordinance. Enforcement of this ordinance shall be solely through "a private cause of action. Neither the City nor its staff is responsible for enforcement of this ordinance. SECTION 3. Severability. If any section or provision of this Ordinance is for any reason held to be invalid or unconstitutional by any court of competent jurisdiction, or contravened by reason of any preemptive legislation, the remaining sections and/or provisions of this Ordinance shall remain valid. The City Council hereby declares that it would have adopted this Ordinance, and each section or provision thereof, regardless of the fact that any one or more section(s) or provision(s) may be declared invalid or .unconstitutional or contravened via legislation. SECTION 4. CEQA. The City Council determines that the adoption of this Urgency Ordinance is exempt from environmental review under the California Environmental Quality Act ("CEQA") pursuant to the following provisions of the CEQA Guidelines, 14 California Code of.Regulations, Chapter 3: this Urgency Ordinance is exempt under CEQA Guidelines Section 15378(b)(5) in that it is not a "project" under CEQA, and will not result in direct or indirect physical changes in the environment. SECTION 5. Adoption, Certification, and Publication. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after passage. , 55575.18100\41694915.1 Ordinance No. 2084 Page 7 PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY COUNCIL THIS 11 12TH DAY OF OCTOBER 2023. 1 ATTEST: BRENDA PREE, MMC, CERA CITY CLERK GRACE ELENA GARNER MAYOR CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS) I, BRENDA PREE, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. 2087 is a full, true, and correct copy, and was introduced at a regular meeting of the City Council on September 26, 2023, and adopted at a regular meeting of the City Council held on October 12, 2023, by the following vote: AYES: Councilmembers deHarte, Holstege, Middleton, NOES: Mayor Pro Tem Bernstein, Mayor Garner ABSENT: None ABSTAIN: None IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ,?-3 Nay of October 2023. BREN A PREE, MMC, CERA CITY CLERK 55575.18100\41694915.1