Food Delivery Service Fee Caps, California Rebuilding Fund and Survey

Dear Business Representatives,

We hope this message finds you well as we enter the month of November. As Santa Clara County operates in the Orange Tier and anticipates more changes to come, the Office of Economic Development aims to continue providing relevant information and assistance to the Milpitas business community. Below you will find information on the City Council’s recent action on assisting our local restaurants, the anticipated California Rebuilding Fund for small business capital and a brief customer service satisfaction survey.

Assistance for Local Restaurants
On Tuesday, October 20, the Milpitas City Council unanimously approved a temporary Urgency Ordinance to assist the local restaurant community during COVID-19. The temporary Urgency Ordinance is an attempt to help restaurants maximize profits and their chances of staying viable through the current health and economic crisis. Milpitas is home to over 225 restaurants, many of whom have been struggling due to the pandemic. Food delivery service providers have helped restaurants stay afloat, however restaurants report that these fees range from 20%-30%, sometimes more, per order, which can heavily reduce or eliminate a restaurant’s profit margins. Effective immediately, the Urgency Ordinance includes the following provisions:

• 15% fee cap on all delivery orders placed through food delivery service platforms 
• 10% fee cap on all non-delivery (pickup) orders
• All tips and gratuities in their full amount must go directly to the delivery driver
• Food delivery service providers must provide an itemized receipt of all fees and charges to the restaurant per order
• If overcharged, the restaurateur may cure the violation directly with the food delivery service provider
• Food delivery services can pass through a credit card processing fee of up to 3% to the restaurant
• A restaurant can elect to receive more services from the food delivery service provider such as marketing and analytics. However, if a restaurant chooses to receive these additional services, then they are subject to an additional 10% in fees
• The Urgency Ordinance expires as soon as the Milpitas City Council terminates the local state of emergency. The flyer for the Urgency Ordinance can be found here.

California Rebuilding Fund
The California Rebuilding Fund will provide capital loans to small businesses to help them “retool, rebuild, and reopen.” The California Rebuilding Fund is made up of philanthropic, public and private sector funds and is intended to serve the small business community. Applicants will be able to apply through a central online portal where they may complete a pre-application that, if a favorable initial eligibility determination is made, will match them with a participating community lender. Applicants must meet eligibility requirements, including having no more than 50 full-time employees and less than $2.5 million in annual revenues. The fund and application process will launch soon; more information can be found here.

How is the Office of Economic Development Doing? 
The Office of Economic Development wants to ensure that the business community receives useful resources and assistance, especially during this challenging time. Please take a moment to fill out a brief customer service satisfaction survey to let us know how we are doing. It should only take 2-3 minutes. 

Additional Resources
The County of Santa Clara has created a business landing page on its COVID-19 website for businesses to find COVID-19 resources and information. Information can be found here or by calling the new COVID-19 Business Call Center at (408) 961-5500.

If you have any questions or need business assistance during COVID-19, please do not hesitate to contact the Office of Economic Development team by sending an email. Assistance is available in English, Chinese, Spanish, Tagalog, Vietnamese, and other languages. We will continue to send out pertinent updates as they are made available to keep you informed.

In community spirit,

Alex Andrade
Economic Development Director
Phone: (408) 586-3046
455 E. Calaveras Blvd., Milpitas CA 95035