Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Portland approves 10% cap on fees that food delivery apps can charge restaurants

oregonlive.com

Post reply on HN
Print view View original

31–40 of 580 posts

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#31

Post by albntomat0 »

andy_ppp wrote: post #27

So as I understand it Deliveroo and Uber eats charge 25% of the food costs, plus delivery fees on top. Uber eats I know is losing money and Deliveroo are losing a few hundred million per year on revenues of about $500m. Basically cutting the food percentage like this to 10% would imply delivery services are permanently unprofitable? Why have all these restaurants signed up if 25% is so unfair?

A number of anti-competitive business practices, such as offering delivery for restaurants without telling them.

Previous discussion: https://news.ycombinator.com/item?id=23216852

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#32

Post by paulgb »

Nextgrid wrote: post #13
itsoktocry wrote: post #6

Earlier quoted context omitted.

> Seems like a solid move Are any of these food delivery companies even making money? What will capping their fees do except make them lose even more?

Food delivery worked for decades when it was done by the restaurant itself so worst-case scenario we wouldn't lose much as these companies go bankrupt and we go back to restaurant-provided delivery. In fact, with all their tech and economies of scale, I'm surprised food delivery services are doing worse in terms of per-unit profitability than the low-tech restaurant-provided ones despite already charging excessive fe…

You're right, and that's why I'm genuinely confused by what's going on. Restaurant delivery used to be a healthy market that didn't need to eat up external capital. Now we have a situation where:

- Restaurants say they are paying too much.

- Delivery companies are losing money.

- Customers are paying fees to the sites in addition to the delivery cost we used to pay.

What gives? It seems these can't all be true.

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#33

Post by josefresco »

andy_ppp wrote: post #27

So as I understand it Deliveroo and Uber eats charge 25% of the food costs, plus delivery fees on top. Uber eats I know is losing money and Deliveroo are losing a few hundred million per year on revenues of about $500m. Basically cutting the food percentage like this to 10% would imply delivery services are permanently unprofitable? Why have all these restaurants signed up if 25% is so unfair?

FOMO? Most of my small business customers that experiment with new tech are simply scared of losing what they have, or envious of competitors who seemingly have more. "My competition is using it so maybe we should too?" is a common phrase heard. Add "delivery services" to the list of failed VC funded tech gambles (see Groupon) that cost small businesses dearly.

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#35

Post by SeanLuke »

wilde wrote: post #28
andy_ppp wrote: post #27

So as I understand it Deliveroo and Uber eats charge 25% of the food costs, plus delivery fees on top. Uber eats I know is losing money and Deliveroo are losing a few hundred million per year on revenues of about $500m. Basically cutting the food percentage like this to 10% would imply delivery services are permanently unprofitable? Why have all these restaurants signed up if 25% is so unfair?

They haven't. Grubhub just scrapes business listings and pretends restaurants sign up. https://www.theverge.com/2020/1/29/21113876/grubhub-seamless...

If restaurants haven't signed up, then how are they getting fees from delivery services?

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#36

Post by gmadsen »

falcolas wrote: post #11

Are any of these food delivery app services actually making profit right now, or are they just burning VC capital? A news podcast I listened to yesterday made the statement that every food delivery company is doing deliveries at a loss. This seems problematic for making delivery a viable business without forming a monopoly to get the scale required to make things profitable.

drivers bringing restaurant food to individual houses doesn't really seem like something that scale helps. More people using the service requires more drivers.

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#37

Post by yakz »

Nextgrid wrote: post #13
itsoktocry wrote: post #6

Earlier quoted context omitted.

> Seems like a solid move Are any of these food delivery companies even making money? What will capping their fees do except make them lose even more?

Food delivery worked for decades when it was done by the restaurant itself so worst-case scenario we wouldn't lose much as these companies go bankrupt and we go back to restaurant-provided delivery. In fact, with all their tech and economies of scale, I'm surprised food delivery services are doing worse in terms of per-unit profitability than the low-tech restaurant-provided ones despite already charging excessive fe…

At least in my part of the US, restaurant-provided delivery was only available from a tiny subset of the restaurants currently delivered from by the third-party services. If a cap has an effect of removing the third-party services, I'm not sure why things wouldn't return to the earlier state of limited restaurant choice.

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#38

Post by brianlweiner »

SeanLuke wrote: post #35
wilde wrote: post #28

Earlier quoted context omitted.

They haven't. Grubhub just scrapes business listings and pretends restaurants sign up. https://www.theverge.com/2020/1/29/21113876/grubhub-seamless...

If restaurants haven't signed up, then how are they getting fees from delivery services?

In at least some cases ... the prices you see on grubhub may be higher than the actual prices the restaurant is charging. E.g $17.99 vs $14.99

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#39

Post by obibring »

This is the right move - local restaurants are hurting and, sadly, the internet is a place where big corps with large budgets have leverage over passionate little guys working their butts off.

For those who want to help, I built a chrome extension similar to Honey that shows a local restaurant's direct ordering website as you're about to order from that restaurant thru a third party service. If direct ordering isn't available, it will also show you if that same order is cheaper elsewhere. If you have a favorite local restaurant that accepts direct orders, please help us add them to our system by filling in this form: https://platerapp.app.link/JACVBOFUY7

For those interested in checking out the extension, it can be downloaded here: https://platerapp.app.link/tDSD3mUTY7 (it doesn't collect browsing history or sell personal info or anything of the sort)

Re: Portland approves 10% cap on fees that food delivery apps can charge restaurants

#40

Post by marcinzm »

Nextgrid wrote: post #13
itsoktocry wrote: post #6

Earlier quoted context omitted.

> Seems like a solid move Are any of these food delivery companies even making money? What will capping their fees do except make them lose even more?

Food delivery worked for decades when it was done by the restaurant itself so worst-case scenario we wouldn't lose much as these companies go bankrupt and we go back to restaurant-provided delivery. In fact, with all their tech and economies of scale, I'm surprised food delivery services are doing worse in terms of per-unit profitability than the low-tech restaurant-provided ones despite already charging excessive fe…

I suspect it's also that small restaurants just paid an illegal immigrant in cash to deliver for them which lowered the costs.
Post reply on HN