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

#201

Post by falcolas » Thu, Jul 09, 2020, 2:50 PM UTC

atdrummond wrote: post #77

falcolas wrote: post #46

Earlier quoted context omitted.

Honestly, those delivery companies are probably underpaying their employees for delivery. I've worked at a pizza delivery company, and including tips, I earned about $140 a day (inflation adjusted, post-taxes) for delivering pizza all over town. It was certainly not enough to provide for a long-term living, given the vehicle upkeep costs and gas.

If I worked that full time, I could easily afford my apartment and other expenses. (Castletown, Isle of Man.) Now, if I still lived in London? Different story. Certain restaurant types (high margin, food well suited for delivery) and locales (high population density) seem well suited for delivery. The local steak house? Probably not, for a number of reasons: - The main profit generator at many sit down venues, drinks…

My only real comment here is that you do also have to put anywhere between $5,000 to $15,000 into your car yearly. Between elevated maintenance costs, additional fuel (somewhere around a tank every 2-3 days), and replacing the vehicle when it fails, it eats into the money pretty quickly.

At least, that was my experience.

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

#202

Post by pwinnski » Thu, Jul 09, 2020, 2:50 PM UTC

MisterTea wrote: post #189

mchanson wrote: post #147

Earlier quoted context omitted.

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

Do you need these services that badly that you're willing to get the government involved? If you don't like the product or the company ethics then don't give them money. The only lesson greed will ever learn from is No Sale.

I don't follow your logic.

I don't need these services badly at all. But since they exist, and are predatory, they "naturally" interpose themselves between the restaurants and their customers unless great effort is made by both the restaurants and all of their customers to avoid it.

It's not a question of wanting or not wanting the services. Some of these companies are so nasty and predatory that they are very, very hard to avoid.

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

#203

Post by waheoo » Thu, Jul 09, 2020, 2:50 PM UTC

andrewla wrote: post #194

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 problem is that this response is in the wrong direction. By forcing prices lower, we guarantee that only over-capitalized predatory businesses can compete in the space. The problem is that consumer advocacy and anti-monopoly are practically the opposite thing. The end result of government action here should be short-term higher prices to the consumer, that reflect the actual cost of operations, rather than lower…

You realise free shipping on ebay and amazon is.. anything but free right?

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

#204

Post by andrewla » Thu, Jul 09, 2020, 2:51 PM UTC

raverbashing wrote: post #181

_sbrk wrote: post #160

Earlier quoted context omitted.

"Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims." Which means that predatory pricing rarely, if ever, exists. If you don't like the 25% delivery fee, GET OFF YOUR ASS AND GO GET YOUR OWN FOOD.

The 25% delivery fee is fine as long as it's explicitly charged to the consumer and not charged as commission from the "restaurant cost" I have no qualms if I order on the system and it shows, let's say: - Pizza: $15 - Delivery fee: $9 And the entirety of the $15 goes to the restaurant But that doesn't seem to be happening

The restaurants have this option, and I frankly have no idea why they don't pass the entire cost of delivery onto the customer. I'm happy to pay a delivery fee, though not everyone will, but the restaurant can strike a balance -- they can choose to raise their prices in general, to fund some of the delivery cost from their direct-ordering and in-person traffic. That's what they're doing anyway, just not being explicit about it.

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

#205

Post by nabilhat » Thu, Jul 09, 2020, 2:51 PM UTC

chrisseaton wrote: post #42

brianlweiner wrote: post #38

Earlier quoted context omitted.

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

So the restaurants are getting the option of delivery and the increased customer base and advertising... for absolutely no change to themselves? And the customers who use delivery are the ones paying for it? And if they don't want to pay it they can still go straight to the restaurant who will again make the same money? Sounds like a win to absolutely everyone involved. What is everyone's problem? Why do we want to i…

> Sounds like a win to absolutely everyone involved.

Let's pare it down to only you and the unsolicited service - You come home from work and the neighbor kid from six blocks down you've never met bills you for mowing your lawn while you were away.

Let's pare it down to only the unsolicited service and the business - Hi, we put out a bunch of ads that say we're you and have a bunch of customers lined up ready to order. We'll tell you who they are for a 10% service fee. Also we lied to your customers about your prices.

Imagine you bought a new car two months ago, then find out the sales person was just some guy who hangs out on the lot, told you he works for the dealership, and charged you a 10% markup over the dealership's actual price. Imagine your elderly neighbors fell for a door-to-door roofing scam that works the same way.

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

#206

Post by ceejayoz » Thu, Jul 09, 2020, 2:51 PM UTC

EForEndeavour wrote: post #190

ceejayoz wrote: post #122

Earlier quoted context omitted.

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…

Sorry, which article are you reading? I'm not seeing anything about forcing third-party delivery platforms to list out their fees separately in the linked article, or in the Portland ordinance itself: https://www.portlandoregon.gov/auditor/article/763323 The law sets a cap on fees (including delivery fees!) of 10% of the menu price, and prohibits delivery companies from withholding wages or tips from delivery staff.

Read the order closely.

> “Purchase Price” means the menu price of an online or phone order. Such term excludes taxes, gratuities, and any other fees that may make up the total cost to the customer of an online order.

> It shall be unlawful for a Third-Party, App-Based Food Delivery Platform to charge a Restaurant a fee (including, without limitation, any delivery fee) for the use of its services that totals more than 10% of the Purchase Price of the order made through the Third-Party, App-Based Food Delivery Platform

Nowhere does it say they can't charge customers a huge app/delivery fee.

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

#207

Post by amyjess » Thu, Jul 09, 2020, 2:52 PM UTC

lotsofpulp wrote: post #175

_sbrk wrote: post #160

Earlier quoted context omitted.

"Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims." Which means that predatory pricing rarely, if ever, exists. If you don't like the 25% delivery fee, GET OFF YOUR ASS AND GO GET YOUR OWN FOOD.

Yes, this is a completely unnecessary law. Restaurant phone numbers are seconds away using the same device used to order from these apps, and a phone call is free. Absolutely no reason a restaurant can’t recoup extra costs by charging the app users more or simply refusing to do business with the app.

This discriminates against deaf/mute customers and customers with severe social anxiety who can't speak to another person.

Charging higher prices to the disabled violates the Americans with Disabilities Act.

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

#208

Post by diebeforei485 » Thu, Jul 09, 2020, 2:53 PM UTC

The problem with showing a $10 delivery fee on top is that it drops conversion rates by a lot.

But by increasing the prices of each menu item by 20% (to cover the app's cut) and having a palatable $3.99 delivery fee (so the total cost to the customer is the same), you can increase sales.

Amazon and other online retailers figured this out a long time ago. Moving some of the shipping fees into the price of the product can boost sales.

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

#209

Post by mindslight » Thu, Jul 09, 2020, 2:53 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.

This ordinance does nothing to regulate consumer prices themselves. Food delivery is a basic need for restaurants during this time. Increased price transparency, which is really the only effect of this ordinance, makes markets function better.

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

#210

Post by waheoo » Thu, Jul 09, 2020, 2:53 PM UTC

lotsofpulp wrote: post #175

_sbrk wrote: post #160

Earlier quoted context omitted.

"Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims." Which means that predatory pricing rarely, if ever, exists. If you don't like the 25% delivery fee, GET OFF YOUR ASS AND GO GET YOUR OWN FOOD.

Yes, this is a completely unnecessary law. Restaurant phone numbers are seconds away using the same device used to order from these apps, and a phone call is free. Absolutely no reason a restaurant can’t recoup extra costs by charging the app users more or simply refusing to do business with the app.

Non competes, price parity rules, and simply market exposure.

You cant start a book selling website without selling on amazon. The market share is too large to function without participating in the monopolistic market platforms.