Portland approves 10% cap on fees that food delivery apps can charge restaurants • Hacker News Board

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

#121

Post by JackFr » Thu, Jul 09, 2020, 2:20 PM UTC

albntomat0 wrote: post #2

Seems like a solid move, given the capture of the market by the food delivery apps, and their shady business practices (like the thread from a while ago where a delivery service was making fake websites for restaurants, without their knowledge or consent). Why have this expire post COVID though?

> Why have this expire post COVID though?

Because COVID has entirely transformed the economics of owning a restaurant. It might be worthwhile revisiting this in the future when eating in restaurants is available (and safe).

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

#122

Post by ceejayoz » Thu, Jul 09, 2020, 2:20 PM UTC

EForEndeavour wrote: post #109

ceejayoz wrote: post #98

Earlier quoted context omitted.

> I believe it's better to fix shady practices. If I pay 25% to Uber, I want to know I paid 25% to them and not the restaurant. Isn't this what this does? It's a cap on the hidden cut these apps take from what the bill shows as the restaurant's revenue. Instead of taking 30% of my $10 pizza, Uber/Grubhub/etc. now have to decide to put that $3 in the fee they show to the user if they want that revenue.

I think the parent commenter would prefer a law that requires ordering platforms to list their cut separately, but doesn't actually cap how big that cut can be. That would give customers more information to choose for themselves whether to use a given ordering platform.

This largely does that, by my reading.

The delivery apps aren't forbidden from charging the customer a sky-high fee. They're just not permitted to hide it in the supposed cost of food.

Before: Pizza ($10), Grubhub fee ($2), delivery fee ($3), but the Grubhub fee is actually $5 because they're taking 30% of the restaurant's revenue behind the scenes.

Now Grubhub has to accurately show their fee as $5 if they want that revenue still. The restaurant either makes more money to stay afloat, or can charge less for the pizzas if they're doing fine.

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

#123

Post by colinmhayes » Thu, Jul 09, 2020, 2:21 PM UTC

maltelandwehr wrote: post #71

Next week there will be complaints that food delivery services are no longer catering to certain areas. Instead of accepting that it is just not profitable for them, journalists will label it as backslash or an act of punishment. Same thing happened in others states/cities that implemented similar rules. The winners are people living in central areas of the city with lots of restaurants. The losers are the poorer out…

I don't understand why people in central areas of the city order delivery. There are 10 amazing restaurants within easy walking distance of me, why order delivery when I can walk for 5 minutes instead?

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

#124

Post by iso1631 » Thu, Jul 09, 2020, 2:21 PM UTC

bootlooped wrote: post #73

iso1631 wrote: post #19

Earlier quoted context omitted.

I've had delivery takeaways in British towns and cities for 2 decades, well before the likes of ubereats and deliveroo. Those companies do their own deliveries and manage to make enough money to not even charge more for delivery (or offer a collection discount) - although usually a minimum cost of say £20. Why can't VC companies do it that efficently?

Individual restaurants don't do many of the things delivery app companies do: offer an multiplatform app, have a sales team, 401k matching, expensive MBAs, software engineers, and lawyers, etc... A lot of overhead, and how can they really save money? Compare that stuff to just hiring a delivery person for near minimum wage.

And my local Chineese has a phone number, prints a new menu delivered round the estate every year or so.

Maybe throwing billions of dollars of AWS scale microservices isn't always the solution

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

#125

Post by wincy » Thu, Jul 09, 2020, 2:21 PM UTC

leetcrew wrote: post #57

darrenoc wrote: post #12

Earlier quoted context omitted.

Nope, they don't make any profit even when charging 30% fees. So this 10% cap will probably cause them to withdraw from the market.

I mean, they're free to recoup the losses by charging a more realistic delivery fee directly to the customer.

I went to order Taco Bell on Doordash last night and the fees were crazy high. I added everything I wanted for me and my family and the cost was something like $60. So I packed up the kids and we drove to Taco Bell. It ended up costing $30. There was a $6.99 delivery fee and each item had $1-2 tacked onto the cost. I guess if they charged a $30 delivery fee at least I wouldn't have gotten "tricked" into getting all the way to the cart before bailing out.

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

#126

Post by _wldu » Thu, Jul 09, 2020, 2:21 PM UTC

_sbrk wrote: post #95

cocoa19 wrote: post #93

I disagree with this move. Why should we force a cap rather than let market competition improve prices? I believe it's better to fix shady practices. If I pay 25% to Uber, I want to know I paid 25% to them and not the restaurant. Then I can decide if the time savings is worth that 25% or not.

Indeed. Let the market discover the proper price for this service.

The market can't discover this when consumers are misled by the delivery services. 10% is reasonable. Let the delivery service add a fee to recover their cost rather than take the food provider's profit. Otherwise, these food providers are going to go out of business (and be bought by the delivery services).

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

#127

Post by vorpalhex » Thu, Jul 09, 2020, 2:21 PM UTC

tonyarkles wrote: post #55

albntomat0 wrote: post #31

Earlier quoted context omitted.

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

There’s a really interesting liability question that comes along with that. If I order food from a restaurant via a delivery service that has no contractual relationship with them, and happen to get sick, who’s on the hook for that? I, legally, have no business relationship with the restaurant in that circumstance.

Not a lawyer but in this case it seems like the delivery company is placing the actual end order with the restaurant on your behalf and is acting as the proxy, so any issues you would take up with the delivery company.

The delivery company may or may not have the ability to rectify issues at the end of the month with the restaurant depending on their relationship.

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

#128

Post by spideymans » Thu, Jul 09, 2020, 2:21 PM UTC

chrisseaton wrote: post #94

treis wrote: post #69

Earlier quoted context omitted.

It's falsifying the restaurants prices. Grubhub shouldn't be able to say a dish costs $15 when it actually costs $10. It's a false statement that harms the restaurant. Sure, they will get some deliveries but what about the people that would buy at $10 but not $15? And what about the people that won't dine in because they think prices are 50% higher than they are. GrubHub is skimming valuable customers while discardin…

> It's falsifying the restaurants prices. It's marking them up... yeah. Is that a problem? Do you realise when you go to a store all the products are 'falsified' by marking them up on top of what the producer sells them to the retailer for?

Imagine Google Shopping marks up all BestBuy items by 50 percent. And then you decide to never shop at BestBuy, whether it be in person or online, because Google’s marked up pricing lead you to believe that BestBuy’s prices are outrageous.

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

#129

Post by YuPro » Thu, Jul 09, 2020, 2:21 PM UTC

chrisseaton wrote: post #100

yellow_postit wrote: post #63

Earlier quoted context omitted.

Option implies that restaurants can opt in/out which for cases like GrubHub isn’t possible. These apps can lead to poor experience and perception of the restaurant due to the delivery short comings and customers tend to transfer any unhappiness with the delivery as being the restaurants fault (eg late delivery and cold food).

> Option implies that restaurants can opt in/out which for cases like GrubHub isn’t possible. Should a manufacturer have the right to say that you can't re-sell something that you bought from them fairly? That doesn't sound great to me. If Doordash fairly buy the food then they can sell it to me (as long as they follow food regulations). That sounds fine, doesn't it?

It shouldn't have the right to restrict re-selling but sure it's ok to have the right to not sell to somebody anymore.

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

#130

Post by EForEndeavour » Thu, Jul 09, 2020, 2:21 PM UTC

cocoa19 wrote: post #104

cocoa19 wrote: post #93

I disagree with this move. Why should we force a cap rather than let market competition improve prices? I believe it's better to fix shady practices. If I pay 25% to Uber, I want to know I paid 25% to them and not the restaurant. Then I can decide if the time savings is worth that 25% or not.

In addition, food delivery is not a basic need, it's a luxury. If a luxury delivery service drives Lamborghinis and charge 200 to wealthy people, so be it. If a Toyota Corolla wants to charge up to 25% for your local pasta restaurant, so be it.

Well, except for times like the past few months in which delivery and takeout (which is also done through third-party platforms) proved to be an essential service across the world.