Ordinance 3289CITY OF ALAMEDA ORDINANCE NO. 3289
New Series
AMENDING THE ALAMEDA MUNICIPAL CODE BY ADDING A NEW ARTICLE XIX
(THIRD-PARTY FOOD DELIVERY SERVICES) OF CHAPTER VI (BUSINESSES,
OCCUPATIONS AND INDUSTRIES) ESTABLISHING A TEMPORARY LIMIT ON
CHARGES IMPOSED BY THIRD-PARTY DELIVERY SERVICES DURING LOCALLY
DECLARED STATE OF EMERGENCY RELATED TO COVID-19 PANDEMIC
WHEREAS, the Alameda Municipal Code (AMC) Chapter 2-24 defines a local
emergency as "the actual or threaten existence of conditions of disaster or of extreme
peril to the safety of persons and property within the jurisdiction"; and
WHEREAS, Government Code Section 8630 allows the City to declare a local
emergency pursuant to an ordinance; and
WHEREAS, Government Code Section 8634 allows a city, including a charter city,
during a local emergency, to promulgate orders and regulations necessary to provide for
the protection of life and property; and
WHEREAS, conditions of extreme peril to the health, safety and welfare of persons
have arisen in the world, the nation, the State, the County of Alameda and the City of
Alameda ("City") due to the following:
International, national, state, and local health and governmental authorities are
responding to an outbreak of respiratory disease caused by a novel coronavirus named
"SARS-CoV-2," and the disease it causes which has been named "coronavirus disease
2019," abbreviated COVID-19 ("COVID-19"). The Center for Disease Control and
Prevention ("CDC") has stated that COVID-19 is a serious public health threat, based on
current information. Cases of COVID-19 have been diagnosed throughout the world, the
United States, the State of California, the County of Alameda and the City of Alameda.
The exact modes of transmission of COVID-19, the factors facilitating human to
human transmission, the extent of asymptomatic viral shedding, the groups most at risk of
serious illness, the attack rate, and the case fatality rate all remain active areas of
investigation. The CDC believes, at this time, the symptoms appear two to fourteen days
after exposure. Currently, there are no vaccine or specific anti-viral treatment for COVID-
19.
Actions are being taken to protect public health and limit the spread of COVID-19
but whether those actions will be successful is unknown at this time.
WHEREAS, on March 1 and 5, 2020, the Alameda County Public Health Officer
issued Declarations of Local Health Emergency, and on March 1 0, 2020, the Alameda
County Board of Supervisors adopted a Resolution ratifying the Declarations of Local
Health Emergency, and on March 17, 2020, the Alameda County Board of Supervisors
adopted a Resolution ratifying the Declaration of Local Emergency; and
WHEREAS, on March 4, 2020, the Governor of the State of California declared a
state of emergency to make additional resources available, formalize emergency actions
already underway across multiple state agencies and departments, and help the state
prepare for a broader spread of CO VI D-19; and
WHEREAS, on March 13, 2020, the President of the United States of America
declared a national emergency and announced that the federal government would make
emergency funding available to assist state and local governments in preventing the
spread and addressing the effects of COVID-19; and
WHEREAS, the CDC, the California Department of Health, and the Alameda
County Department of Public Health have all issued recommendations including but not
limited to strict adherence to social distancing guidelines, canceling or postponing group
events, working from home, and other precautions to protect public health and prevent
transmission of this communicable virus. Other counties throughout the state have similar
directives; and
WHEREAS, on March 16, 2020, the Alameda County Public H~alth Officer issued
a countywide order that prohibits all public and private group gatherings and requires
people to shelter at their place of residence with limited exceptions. The purpose of the
Order was to restrict and limit gathering of persons and require closures of non-essential
retail businesses in an effort to stem or slow the spread of the · virus; and
WHEREAS, on March 17, 2020, the City Council made findings that due to the
COVID-19 pandemic, conditions of extreme peril to the health, safety and welfare of
persons have arisen in the City of Alameda and, based thereon, adopted an urgency
ordinance (Ordinance No. 3267) declaring a local emergency exists in the City as a result
of the COVID-19 pandemic, and on April?, 2020, the City Council made findings that a
local emergency continues to exist in the City as a result of the COVID-19 pandemic and,
based thereon, adopted an urgency ordinance (Ordinance No. 3272) extending the
declaration of the existence of a local emergency; and
WHEREAS, on March 19, 2020, the Governor of the State of California issued
Executive Order N-33-20, an Order of the State Public Health Officer ordering all
individuals living in California to stay home or at their place of residence except as needed
to maintain continuity of operations of outlined federal critical infrastructure sectors ("State
Shelter Order"); and
WHEREAS, effective July 13, 2020, the State Public Health Officer issued an order
closing all indoor restaurant dining; and
WHEREAS, the Alameda County Health Officer has consistently maintained, since
the inception of the pandemic, that indoor dining must remain prohibited to slow the
spread of COVID-19; and
WHEREAS, the County of Alameda has more than 1,200 full-service restaurants,
more per capita than the State average, and the City of Alameda is home to a diverse
and vibrant food and beverage scene; and
WHEREAS, during the COVID-19 pandemic restaurants, a critical component of
the US food supply chain, have been restricted to takeout or delivery offerings, and limited
dining with decreased capacity, which has placed a sudden and severe financial strain
on these local businesses, particularly those that already operate on thin margins, adding
to financial pressures in the industry that predate the COVID-19 crisis; and
WHEREAS, restaurants have had to pivot to and ramp up delivery and takeout
options to continue to provide these essential services to the public; and
WHEREAS, even if indoor dining is authorized by law, many persons, especially
persons with special vulnerabilities to COVID-19, such as the elderly or
immunocompromised individuals, will continue to be precluded from engaging in indoor
dining during the COVID-19 pandemic; and
WHEREAS, such vulnerable individuals are often also most unable to absorb price
increases, especially when those increases relate to life sustaining materials such as
food; and
WHEREAS, many consumers use third-party applications and websites to place
food and beverage orders with these establishments for delivery and takeout; and many
do so out of necessity because they lack the ability or capacity to obtain life sustaining
food through any other means; and
WHEREAS, these third-party platforms charge restaurants fees and surcharges
for use of their services; and
WHEREAS, service agreements between some restaurants and third-party
platforms provide for the payment of fees and charges that can range from 15 percent of
the purchase price per order to up to 31 percent of the purchase price per order; and
WHEREAS, while some restaurants negotiated such fees and surcharges prior to
the COVID-19 pandemic, the pandemic and the ensuing emergency has made deliveries
a principal means of restaurant operations; and
WHEREAS, restaurants and residents report that these fees and surcharges are
now unsustainable, given the dire financial straits these establishments now face, their
limited bargaining power to negotiate a reduction with third party platforms and residents'
similar inability to afford such surcharges for life sustaining food; and
WHEREAS, if Alameda restaurants close as a result of high fees from third-party
delivery services, their workers will lose employment and vulnerable customers will lose
essential services, thereby affecting their ability to provide for their families and to remain
safe during the COVID-19 pandemic; and
WHEREAS, other cities have adopted limits on delivery service fees, and in -
response online platforms have fought back by increasing fees to consumers and reduced
delivery radius thereby frustrating local regulation adopted to address impacts to
consumers who are sheltering in place and restaurant workers; and
WHEREAS, any such end-run actions by third-party food service delivery
companies and restaurant closures due to exorbitant delivery fees will also further limit
food options for residents, could place vulnerable residents in untenable positions of not
being able to obtain life sustaining food, and further disrupt US food supply chain; and
WHEREAS, California Penal Code section §396 (1) prohibits price-gouging during
an emergency, (2) does not preempt local legislative bodies from prohibiting by ordinance
the same or similar conduct or imposing more severe penalties for the same conduct; and
(3) the California Legislature explicitly intended that Penal Code section 396 be liberally
construed so that its beneficial purposes may be served; and
WHEREAS, adopting a combined cap on per-order fees charged to consumers
and restaurants at 15 percent will accomplish the legitimate public purpose of easing the
financial burden on struggling restaurants, their employees, and consumers while
safeguarding their health and welfare, and that of their employees and consumers, during
this emergency and not unduly burdening third-party platforms; and
WHEREAS, the City Council determines that the City of Alameda must take
immediate affirmative measures, including establishing a limit on fees and surcharges
paid by restaurants and consumers to food service delivery platforms, as it is necessary
for the immediate preservation of the public peace, health, and safety. Social distancing
and stay-at-home orders, in addition to other health orders and directives, all of which
reduce service capacity, are expected to remain in force for the foreseeable future.
Essential workers who strengthen the US food supply chain by working in the restaurant
industry will continue to be called upon to serve. It is unclear how quickly patrons of these
businesses will return and restaurants when these orders and directives are ultimately
lifted, thereby posing seemingly interminable threat of loss of employment to more
employees and loss of income. As state anti-gouging laws do not provide any protections
in the market for food delivery services, this order is necessary to enable the City of
Alameda to ensure the continuity of essential food services for its residents, the economic
viability of local businesses who employee essential workers, and to protect against
predatory activity for the duration of the pandemic; and
WHEREAS, for the reasons set forth above, this Ordinance is declared by the City
Council to be necessary for preserving the public welfare, health, or safety and to avoid
a current, immediate and direct threat to the health, safety or welfare of the community,
and the recitals above taken together constitute the City Council's statements of the
reasons constituting such necessity of such regulation; and
WHEREAS, this Ordinance is adopted pursuant to the City's police powers and
powers afforded to the City in time of national, state, county and local emergency during
an unprecedented health pandemic, such powers being afforded · by the State
Constitution, State law, the City Charter and the Alameda Municipal Code ("AMC") to
protect the public welfare, health, and safety, and to protect life and property as affected
by the emergency; and
WHEREAS, adoption of this ordinance is exempt from review under the California
Environmental Quality Act ("CEQA") under CEQA Guidelines Sections 15378 (not a
project) and 15061 (b)(3) (no significant environmental impact); and
WHEREAS, by the staff report, testimony, and documentary evidence presented
at the September 15, 2020 City Council meeting, the City Council has been provided with
additional information upon which the findings and actions set forth in this ordinance are
based.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
ALAMEDA as follows:
Section 1 : Alameda Municipal Code Article XIX (Third-Party Delivery Services) is
hereby added to read as follows:
6-62 Third-Party Food Delivery Services
6-62.1 Definitions
City means the City of Alameda.
Service Fee means any fee charged by a Third-Party Food Delivery Service for providing
a Retail Food Establishment with a service that delivers or assists the purchase of food
and beverages from such establishment to customers.
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 or
software-or application-based order, for delivery or pick-up within the City.
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.
Retail Food Establishment means a restaurant, delicatessen, bakery, coffee shop, or
other eat-in or carry-out service of processed or prepared raw and ready-to-eat food or
beverages.
Third-Party Food Delivery Service means any website, mobile application, or other
electronic or 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.
6-62.2 Prohibitions
a. It shall be unlawful for a Third-Party Food Delivery Service to charge a Retail Food
Establishment a Service Fee that totals more than 15 percent of the Purchase
Price of each Online Order.
b. It shall be unlawful for a Third-Party Food Delivery Service to increase any fee,
cost, or commission, or establish any new fee, cost or commission, with respect to
customers beyond those established on September 3, 2020.
c. 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.
d. It shall be 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.
e. It shall be unlawful for a Third-Party Food Delivery Service to collect any fee from
a food service establishment or its customers for a telephone order if a telephone
call between such establishment and a customer made to place the order does not
result in an actual transaction.
6-62.3 Disclosure Requirements
a. Upon a request, 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:
1. the Purchase Price of the food and beverages at the cost listed on the Retail
Food Establishment's menu;
2. all fees, costs, or commissions charged to the Retail Food Establishment for
delivery services;
6-62.4
3. all fees,· costs, or commissions to the customer by the Third-Party Food
Delivery Service; and
4. any tip or gratuity that will be paid to the person delivering the food or
beverages.
Enforcement
a. Any person who violates any provision of this Article shall be guilty of an infraction
which shall be punishable by a fine not exceeding $250.00, or a misdemeanor,
which shall be punishable by a fine not exceeding $1 ,_000.00, or by imprisonment
in the County Jail for a period not exceeding 6 months, or by both such fine and
imprisonment.
b. Any person who violates any provision of this Article may be subject to
Administrative citations issued pursuant to Article 1-7 of this Code.
c. The City Attorney, pursuant to Section 18-23.9 of this Code, or any aggrieved
private party, may enforce, and seek to enjoin any violation of, this Article by means
of a civil action. The burden of proof in such cases shall be preponderance of the
evidence. As part of any civil action brought by the City to enforce this Article, a
court shall assess a civil penalty in an amount up to ($1 ,000.00) dollars per
violation, against any person who commits, continues to commit, operates, allows
or maintains any violation of this Article.
d. Any person convicted of violating any provision of this Article in a criminal case or
found to be in violation of this Article in a civil or administrative case brought by a
law enforcement agency, including but not limited to the City of Alameda, shall be
ordered to reimburse the City and other participating law enforcement agencies
their full investigative costs.
e. Any civil action initiated by a private party alleging a violation of any provision of
this Article 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 Article 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.
f. This Article is not intended to, and does not, create any rights or benefits,
substantive or procedural, enforceable at law or in equity, against the City of
Alameda, its departments, officers, or employees.
g. The remedies provided in this Article are cumulative, and nothing in this Article
shall preclude any person from seeking any other remedies, penalties or
procedures provided by law.
6-62.6 Exception
a. Nothing in this Article shall be construed as imposing a limitation on Third-Party
Food Delivery Service if doing so would be in violation of the Constitution of the
United States, or the Constitution of the State of California. Accordingly, the
requirements of this Article shall not apply or shall be limited to an extent to avoid
any unconstitutional deprivation of the Third-Party Food Delivery Service's
constitutional rights.
b. Notwithstanding the limitations set forth in Section 1-8.01 (a) of this Code, any
Third-Party Food Delivery Service seeking an exception from the requirements of
this Article shall file an application with the City that includes each and every
contested issue or basis for the application, along with relevant evidence in
support thereof, which shall be reviewed by a City hearing officer and constitute
the City's final decision on the matter.
c. The burden of establishing by satisfactory factual proof of a constitutional
deprivation, by a preponderance of the evidence, shall be on the Third-Party Food
Delivery Service.
d. No exception or limit shall be granted pursuant to this section unless a finding is
made, based on satisfactory factual proof provided by the Third-Party Food
Delivery Service, of a constitutional deprivation.
6-62.7 Implementing Regulations
The City Manager, or his/her designee, shall have the authority to adopt all necessary
guidelines, procedures, and regulations to implement the requirements and fulfill the
policies and purposes of this Article.
6-62.8 Sunset
This Article shall sunset and be of no further force or effect upon the City Council taking
affirmative action to terminate the local state of emergency due to the CO VI D-19
pandemic or when businesses may restore in-person service to 1 00% capacity,
whichever is later.
Section 2: IMPLIED REPEAL
Any provision of the AMC inconsistent with this Ordinance, to the extent of such
inconsistencies and no further, is hereby repealed or modified to the extent necessary to
effectuate this Ordinance.
Section 3: CEQA DETERMINATION
The City Council finds and determines that the adoption of this ordinance is exempt from
review under the California Environmental Quality Act (CEQA) pursuant to the following,
each a separate and independent basis: CEQA Guidelines, Section 15378 (not a project)
and Section 15061 (b)(3) (no significant environmental impact).
Section 4: SEVERABILITY
If any provision of this Ordinance is held by a court of competent jurisdiction to be invalid,
this invalidity shall not affect other provisions of this Ordinance that can be given effect
without the invalid provision and therefore the provisions of this Ordinance are severable.
The City Council declares that it would have enacted each section, subsection,
paragraph, subparagraph and sentence notwithstanding the invalidity of any other
section, subsection, paragraph, subparagraph or sentence.
Section 5: EFFECTIVE DATE
This Ordinance shall be in full force and effect from and after the expiration of thirty (30}
days from the date of its final passage, except subsection (b) of section 6-62.6 of this
Ordinance, which shall apply retroactively to the date the agenda report introducing this
Ordinance on first reading is published .
Attest:
Lara Weisiger, City lerk
*****
I, the undersigned, hereby certify that the foregoing Ordinance was duly and
regularly adopted and passed by the Council of the City of Alameda in a regular
meeting assembled on the 6th day of October, 2020, by the following vote to wit:
AYES: Councilmembers Daysog, Knox White, Oddie, Vella and
Mayor Ezzy Ashcraft-5.
NOES: None.
ABSENT: None.
ABSTENTIONS: None.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of
said City this 7th day of October, 2020.
Approved as to form:
Lara Weisiger, City
City of Alameda