Boston City Council weighing new food delivery tax

The Boston City Council is considering hitting companies like DoorDash, Grubhub and Uber Eats with a new delivery tax on food orders as part of a city crackdown on their unruly drivers, but critics say consumers and restaurants will pay the price.

The Council is discussing a potential amendment to a “road safety and accountability for delivery providers ordinance” proposed by the mayor that would tack on a 15-cent delivery fee per order for national third-party food delivery companies that operate in Boston.

The potential new fee has proven to be contentious thus far.

The Massachusetts Restaurant Association sent a letter to the mayor and City Council outlining its opposition, but the councilor behind the idea says it’s a key approach to ensuring enforcement of the proposed ordinance, which aims to crack down on food-app delivery drivers who flout traffic rules.

“The 15-cent delivery fee is a necessary step to address the increased strain delivery traffic places on our streets,” Councilor Sharon Durkan, who proposed the fee amendment, said in a statement to the Herald. “This fee ensures we can effectively implement the ordinance and acknowledge the real costs these services impose on Boston.”

Councilor Gabriela Coletta Zapata, who chairs the subcommittee that has held hearings on the mayor’s proposed ordinance, said the new tax is “currently on the table as a possible addition” to the measure, which needs Council approval.

“It would theoretically be a 15-cent per order fee that would help cover costs of the enforcement of the ordinance,” Coletta Zapata told the Herald.

Stephen Clark, president and CEO of the Massachusetts Restaurant Association, sent letters to Mayor Michelle Wu and the 13 city councilors last Thursday with the group’s concerns about the fee, which had been discussed that morning by the Council as part of a working session it held to tweak the ordinance.

“This will make delivery more expensive in the city and discourages consumers from ordering and doing business with restaurants in Boston,” Clark wrote.

“During a time when our attorney general is looking to limit additional fees and surcharges, it does not seem like the government should be adding new fees to Boston residents,” his letter states.

Clark’s letter also lists a number of concerns the Restaurant Association has with the mayor’s ordinance, which it says will lead to “rising delivery costs” and “increased red tape” and pose a “threat to restaurant and consumer privacy” through its data-sharing requirements.

“The proposed ordinance,” Clark wrote, “is intended to alleviate traffic congestion, but enforcing existing regulations will have a far greater impact. This proposed ordinance … does little to help the problem at hand and will only hurt our small local businesses and consumers who rely on third-party deliveries.”

In a phone interview, Clark clarified that the Restaurant Association is not necessarily opposed to the ordinance as proposed by the mayor. He said the group is open to “commonsense regulations going into effect” and conversations with city officials to tweak the measure’s language to address its concerns.

The Restaurant Association is staunchly opposed, however, to the potential new delivery fee being discussed by the City Council, Clark said.

“I wasn’t bashing the mayor,” Clark said. “I should have just CC’d the mayor. We were writing it to the City Council because they’ve had multiple working sessions on this, and the fee has originated from the City Council, not the mayor.”

Wu’s office said “the mayor did not include any fee or tax on restaurant orders in the original ordinance filed.”

The city has been in close conversation with the delivery companies and advocates to protect consumer privacy, the mayor’s office said.

“This ordinance holds large, national delivery companies accountable and will ensure drivers have insurance coverage while making our streets safer for everyone,” a Wu spokesperson said in a statement.

“Data gathered will help the city better plan for food delivery impacts, which has resulted in an alarming increase of dangerous driving, worsened congestion and double parking — all negatively impacting resident experiences and business operations.”

“We are optimistic that the final bill will earn broad support from neighborhood residents and businesses,” the Wu spokesperson said.

Coletta Zapata said the Council would have to take action on the mayor’s ordinance, and any potential amendments including the new fee, by the first week of April to comply with the 60-day order.

If the Council chooses to take no action, it would go into effect, with the language proposed by the mayor. A vote would have to be taken at the next weekly meeting, on April 2.

“Although I support much of the proposed ordinance, I will vote against it based on a new tax that will ultimately be passed on to restaurants and the public,” Councilor Ed Flynn said in a statement to the Herald. “It’s not the time for a new tax in Boston. We must demonstrate fiscal discipline and responsibility.”

Per the language of the amendment, the Boston Transportation Department “may periodically review and adjust the delivery fee, subject to a review and approval by the City Council, to ensure it remains effective.”

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Durkan acknowledged that there’s a “clear debate about who bears these costs,” but said the “hearing really illuminated the Council’s commitment to exploring all avenues to prevent these fees from being passed onto local businesses or delivery drivers.”

“We should ensure a fair and balanced approach that holds third-party delivery companies accountable while protecting our local economy,” Durkan said.

Paul Craney, executive director of the Massachusetts Fiscal Alliance, said he wasn’t buying it.

“Some Boston city councilors have never seen a tax or fee they don’t like,” Craney told the Herald. “In this case, they want to nickel and dime consumers which will only increase the price of food.

“City councilors who favor this have completely lost their bearing,” he added. “Elected officials should not be justifying any taxes or fees that will drive up the cost of food.”

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