NewsLocal News


Denver restaurants could see less third-party delivery fees

Posted at 6:53 PM, Sep 14, 2020
and last updated 2020-09-15 01:15:48-04

DENVER — At Blue Pan, they strive to make every pizza excellent.

"Currently, we’re the only Detroit-style pizzeria in Denver. The main characteristic of our product is the caramelized crust," said Co-Founder of Blue Pan Pizza, Giles Flanagin.

Their last five years in business have come with lessons, especially when it comes to using third-party delivery companies like DoorDash, UberEats, or Postmates.

"On the commission side, I see their commissions, at least for us, being extraordinarily excessive. Margins in the restaurant industry are incredibly tight, especially now, and to pay a 20, 30% commission makes absolutely no good business sense," said Flanigan.

So, they’ve completely opted out of working with these companies and manage their own deliveries instead.

But Denver City Councilwoman Kendra Black is working to change the commission cap to 15%.

"It’s very expensive to operate a small business in Denver. We have high real estate costs, commercial property taxes are high, labor costs are high. Our small local restaurants are really, really struggling, and so I just wanted to do something to help them out," said Black.

For Sonia Riggs with the Colorado Restaurant Association, it could also help other family owned restaurants to market their businesses on these apps, where before it was just too expensive.

"It’s something that could really help these small, independent, neighborhood restaurants. We’re really looking at and anticipating a lot of additional closures for restaurants over the winter, and that’s a time when they’re going to heavily rely on takeout and delivery," said Riggs.

But even if 15% is approved by city council, Flangian says customer service issues remain.

"I think that if third party deliveries invested more resources and trained their employees to understand that they are really representing the restaurant that’s paying them their commission. That that might help change some of the negative behavior that we have started to experience on much more frequent level," said Flanigan.

Whether he’ll renew his relationship with the popular delivery apps is uncertain. What is clear for Flanigan, is the current commission scale isn't working out.

If the measure is approved it could be in effect as early as Oct. 9.