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

#141

Post by donatj » Thu, Jul 09, 2020, 2:25 PM UTC

colinmhayes wrote: post #123

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?

- There is a pandemic going on

- Not everyone is physically able

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

#142

Post by cwhiz » Thu, Jul 09, 2020, 2:25 PM UTC

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.

This is a cap on the invisible fee that Uber and other companies charge to restaurants. It is not transparent or visible on the consumer end that a restaurant is only getting 75% of the listed food prices.

This is, in effect, forcing these delivery companies to be more transparent about their pricing. Instead of charging a restaurant an invisible 25% it will be capped at 10% and the delivery companies will have to move the remaining 15% onto the consumer. Or I guess they can eat the 15% but they can't make money as it is, so I doubt that.

I would be fine if it was instead just a total price transparency law. I think consumers should know exactly where their bill is going. However, these delivery companies are extraordinarily shady and I believe they would leave no stone unturned to obfuscate the fact that they are secretly ripping off restaurants. I think capping the invisible restaurant fee at 10% is the simplest approach to reach the same desired end result.

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

#143

Post by MisterTea » Thu, Jul 09, 2020, 2:26 PM UTC

inkaudio wrote: post #99

This is a regulatory response to Silicon Valley’s implementation of predatory pricing. Let me explain: Predatory pricing is defined as “the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.” For silicon valley startups like Doordash and Grubhub this is accomplished by acquiring customers at a significant loss in ways that may often seem idiotic. e…

> The End game is to be the dominant food ordering platform in any given town where you get to dictate rates like 25%.

You fight back by calling your order in and having them deliver it or pick it up yourself. I do this 99%* of the time as I refuse to pay a web server $8+ order+delivery fee for a meal that costs the same. It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks/cycle/drive to get their meal.

*save for the rare late night drunk+high AF Dominoes orders.

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

#144

Post by dubcanada » Thu, Jul 09, 2020, 2:26 PM UTC

colinmhayes wrote: post #123

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?

Cause people are lazy/committed to something else/working too much/sick/what ever else? They wouldn't be ordering delivery at all if they weren't. They would make their own food.

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

#145

Post by chrisseaton » Thu, Jul 09, 2020, 2:27 PM UTC

YuPro wrote: post #129

chrisseaton wrote: post #100

Earlier quoted context omitted.

> 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.

They've already got that right.

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

#146

Post by tonyarkles » Thu, Jul 09, 2020, 2:28 PM UTC

zwily wrote: post #79

tonyarkles wrote: post #55

Earlier quoted context omitted.

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.

Legally, do you have a business relationship with a company you buy a product from on Amazon?

That’s an interesting comparison! I admit it I took business law a long time ago, but I think the answer is: it depends. You’d also need to dig deep into the TOS for both the consumer side and the seller side. But ignoring the specific details, here’s my general thought process:

- products sold directly by Amazon: you have products sourced through (nominally) a legitimate supply chain, where there are legal agreements for Amazon to be a distributor of the products. If the product is faulty, Amazon is likely protected by those agreements and the liability will likely ripple back to the OEM. But, Amazon sold the product to you, and depending on consumer protection laws in your jurisdiction, may ultimately be responsible if, say, the manufacturer goes out of business.

- Fulfilled by Amazon: this gets trickier. In this case, it’s relatively clear that you’re not purchasing the product from Amazon, but rather from a company that has stored their product in Amazon’s warehouse. It seems to me that Amazon is less likely to be on the hook for this.

- Third-party sellers: Amazon is mostly just a catalogue and payment processor in this situation, not to different than Etsy. Most likely the seller is on the hook here and not Amazon. Depending on how the seller came to acquire the product (legit supply chain or other), the manufacturer may or may not be on the hook via the distribution-agreement ripple. (For example, an independent company that refurbs broken phones and resells them on Amazon is unlikely to create liability for Samsung)

In the delivery case, we’ve got an unlicensed (health inspector-wise) company distributing prepared food from a vendor they have no formal agreement with. If someone were to get sick, it seems pretty reasonable for the restaurant to shrug and say “we followed proper food handling protocols, maybe the liability should go onto the unlicensed company that bought our food, did who knows what with it, and resold it without our permission”.

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

#147

Post by mchanson » Thu, Jul 09, 2020, 2:28 PM UTC

MisterTea wrote: post #143

inkaudio wrote: post #99

This is a regulatory response to Silicon Valley’s implementation of predatory pricing. Let me explain: Predatory pricing is defined as “the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.” For silicon valley startups like Doordash and Grubhub this is accomplished by acquiring customers at a significant loss in ways that may often seem idiotic. e…

> The End game is to be the dominant food ordering platform in any given town where you get to dictate rates like 25%. You fight back by calling your order in and having them deliver it or pick it up yourself. I do this 99%* of the time as I refuse to pay a web server $8+ order+delivery fee for a meal that costs the same. It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks…

Or just regulate the dumb behavior of these dumb start ups to not distort the market in dumb damaging ways,

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

#148

Post by deelowe » Thu, Jul 09, 2020, 2:29 PM UTC

MisterTea wrote: post #143

inkaudio wrote: post #99

This is a regulatory response to Silicon Valley’s implementation of predatory pricing. Let me explain: Predatory pricing is defined as “the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.” For silicon valley startups like Doordash and Grubhub this is accomplished by acquiring customers at a significant loss in ways that may often seem idiotic. e…

> The End game is to be the dominant food ordering platform in any given town where you get to dictate rates like 25%. You fight back by calling your order in and having them deliver it or pick it up yourself. I do this 99%* of the time as I refuse to pay a web server $8+ order+delivery fee for a meal that costs the same. It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks…

In my experience, most restaurant staff get super upset about this -- especially if you ask them to bring your order out. Restaurant owners need to be more clear with their staff about needing to support this.

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

#149

Post by chrisseaton » Thu, Jul 09, 2020, 2:30 PM UTC

treis wrote: post #131

chrisseaton wrote: post #94

Earlier quoted context omitted.

> 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?

No, because since the beginning of retail stores that is how it has worked and everyone understands that. For food delivery it has always been that you buy from the restaurant and pay menu price + delivery charge. Grubhub et.al. have come along and used that understanding along with an implied relationship to the restaurant to deceive the customer.

I don't really get it.

Doordash or whatever says 'for $x we will put a WhateverBurger burger into your hand'. As long as that's what they achieve, this seems fundamentally honest to me.

As a consumer I don't really care where that $x goes to - Doordash, WhateverBurger, delivery person... doesn't seem my business to interfere in people's private financial agreements.

The diner gets offered a deal and can take it or not.

The restaurant gets offered a deal and can take it or not.

The delivery person gets offered a deal and can take it or not.

Seems to me like everyone is acting ethically here, and everyone is accepting a deal they're presumably happy with. If they aren't, they can turn it down and go elsewhere.

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

#150

Post by ceejayoz » Thu, Jul 09, 2020, 2:30 PM UTC

mchusma wrote: post #108

If we were going to limit profits, we should target visa/MasterCard/amex instead. They are a true oligopoly taxing the entire economy and have acted in a highly anti-trust fashion. Limiting their fees to something like 0.1% of the transaction is plenty to not lose money and would put back something like 2.8% of every transaction back into lower prices or into the businesses hands.

I think you're looking at that market from the wrong angle. Competition in the credit card world pushes transaction fees up, because the competition isn't over the fees, it's competition to see who can offer the best credit card rewards. Cash back, airport lounges, travel points, concierge services...