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Cerritos Mayor, Council Allies Fail to Cap Third Party Delivery Fees

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Opinion by HMG Publisher Brian Hews

February 15, 2021

Local cities such as Artesia, Hawaiian Gardens, Buena Park, and Irvine have done it, the cities of Los Angeles and New York also, but when it comes to capping third-party delivery service fees charged to Cerritos businesses, Cerritos Mayor Naresh Solanki, Mayor pro tem Chong Vo and Councilman Bruce Barrows have dragged their feet.

At the January 14 meeting, Councilman Frank Yokoyama brought the issue up but the three, who always vote in tandem, refused to hear the issue.

Who knows what they’re waiting for since several cities in the area have implemented the price gouging cap, and that’s what it is, price gouging during a pandemic.

There was a group of restaurants that petitioned the L.A. City Council to refrain from capping fees, but the group was put together by the delivery service Postmates.

The usage of third-party delivery services has skyrocketed since the beginning of the pandemic, and like any new industry, there are very few regulations.

Third party delivery services charges are based on the total bill and they have two charges; a percentage fee for delivery and another percentage fee for order pick up. UberEats charges a whopping 45% for their service.

Big box stores have reacted by establishing their own delivery service, local mom and pops stores can’t do that.

Next to payroll, food costs are the highest expenses incurred by a restaurant, adding 45% would likely prohibit restaurants from using delivery companies, causing them to lose business to other restaurants.

And for restaurants that’s hard to get the business back, because they lose market share permanently; customers find food that is just as good or better.

In the long run this will hurt Cerritos financially with loss of revenues from the General Fund. Is that good for the city? Obviously not.

Why are Solanki, Vo, and Barrows dragging their feet? Is there some thoughts that if they cap delivery fees somehow it will cut into the city’s tax revenue?

It’s the same myopic views they had when they were against the city’s sales tax increase measure; where would the city be if that passed?

In this paper’s opinion Mayor Solanki has a conflict of interest because he owns a chain of supermarkets which are competitors to restaurants, therefore he should recuse himself from the issue.

Other cities around Cerritos have implemented a cap enabling Cerritos residents to buy cheaper food from restaurants outside the city.

In this time of a pandemic cities, who are getting help from the federal government now that a competent president is in charge, should help their local business base any way they can.

Step up Solanki, Vo, and Barrows and help out the mom and pop stores in Cerritos.

The City Council contact page is here.

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