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

oregonlive.com

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

#331

Post by sidr »

andrewla wrote: post #301
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,

No! Absolutely do not do this! Do not listen to this idea! Regulation is the wrong solution here! Warning! Jaguars will eat you if you do this! Prosecute the dumb startups for breaking the law. Don't force everyone to comply with some stupid pricing regulations and fill out a trillion forms when they're not doing anything wrong. Legislators should legislate, law enforcement should enforce laws. Regulators will just b…

Do you have any evidence that this particular rule actually involves any additional cumbersome paperwork? Is this just a knee-jerk reaction to the word "regulation"? Would it be better if the word "law" was used instead?

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

#332

Post by dml2135 »

andrewla wrote: post #301
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,

No! Absolutely do not do this! Do not listen to this idea! Regulation is the wrong solution here! Warning! Jaguars will eat you if you do this! Prosecute the dumb startups for breaking the law. Don't force everyone to comply with some stupid pricing regulations and fill out a trillion forms when they're not doing anything wrong. Legislators should legislate, law enforcement should enforce laws. Regulators will just b…

I don't really see your distinctions here. Regulations have the force of law, and regulators are law enforcement.

Unless you are referring to some of the anti-trust laws which are actually criminal statutes? In that case I'm on the same page that we should actually start enforcing those.

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

#333

Post by crazygringo »

mindslight wrote: post #306
crazygringo wrote: post #263

Earlier quoted context omitted.

Huh? I don't understand what you're saying at all. This is a cap on the commission charged. The article doesn't say anything about total price or about misrepresenting prices. Where are you getting that? Why are you saying people aren't reading the article? And the fraudulent number thing is a separate issue, totally unrelated to level of competition. It's scummy but irrelevant to this particular issue. Competition e…

(the critical detail is contained in the full headline - "can charge restaurants ") The commission is the cut of the "food price" that the delivery service gets from the restaurant, in addition to charging the customer-facing "delivery fee". So if the customer sees "Pizza $20, Delivery $5", and the restaurant is paying 30% to the delivery service, the actual breakdown is "Pizza $14, Delivery $11". It's misleading to…

> It's misleading to say that the pizza costs $20 when $6 of that is actually a hidden delivery fee.

No it's not. While some delivery sites do list higher prices than in-restaurant (arguably misleading), that's not the norm. And as long as they don't, then if a pizza is $20, then if you're eating in-house $6 of that is going to dining space, tables and chairs, plates and utensils, dishwashing, etc. If it's delivery, the $6 is going to the delivery service, which includes listings, website maintenance, etc. All businesses spread their costs out among customers in different ways. There's nothing misleading about it.

And again, "scummy terms" in no way implies lack of competition. Not sure where you got that idea from? Tons of industries are full of scummy terms while competition is thriving. Scummy terms have nothing to do with lack of competition and everything to do with which marketing funnels and pricing strategies turn out to be most effective. It's mainly about consumer psychology.

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

#334

Post by belltaco »

saluki wrote: post #323
andrewla wrote: post #282

Earlier quoted context omitted.

Only if they don't change it in the future in response to "market forces", or if they start charging consumers fees directly or some other workaround and then the city council has to retract this guidance because people are complaining about the higher prices.

The restaurant should get paid regular price for their food and maybe even a little extra to cover boxing it nicely for delivery, keeping it warm. The delivery company should charge the customer the price they need pay to have it delivered to them. I expect the 10% max fee if around the margin the restaurant is making so I'm not sure this fixes anything. Food delivery is an awesome service but it costs money, consume…

You think all of that hasn't been tried already? Why would the delivery services leave free money on the table if it worked? Consumers would not pay those high costs in enough numbers to make it work so we end up with this model. It's a very price sensitive market.

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

#335

Post by koheripbal »

ip26 wrote: post #278
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…

If food delivery services suspend service in Portland tomorrow, I would find it pretty hard to believe it isn't political maneuvering to prevent other localities from doing the same.

They won't stop delivering in Portland, they'll just stop delivering to certain areas that are more out of the way.

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

#336

Post by NoSorryCannot »

mardifoufs wrote: post #324
carlmr wrote: post #277

Earlier quoted context omitted.

Then they should cease being in business.

Couldn't the same argument be made for restaurants? If they can't afford delivery fees, or can't afford to make money without delivery they shouldn't be in business either.

Yes, of course, and they often do go out of business.

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

#337

Post by verall »

andrewla wrote: post #297
MisterTea wrote: post #143

Earlier quoted context omitted.

> 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…

"You fight back by calling your order in" -- if they are offering free delivery through an app, all you are doing is paying inflated prices to subsidize their delivery customers. If they are not offering you an explicit called-in or picked-up discount, you're not really helping anyone except all those people using the app.

That makes no sense. Maybe normally ordering at my favorite place nets them about $5. I don't want any gig economy startup cutting into that profit, when I pay it. I understand it is worth it for the restaurant to take GH orders and net $3 on them, I just think using that service is the wrong option.

I care about supporting my favorite local eats. Same reason we should all be tipping full even when getting take out. Support your local restaurants. Many are about to go out of business.

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

#338

Post by Spivak »

mardifoufs wrote: post #324
carlmr wrote: post #277

Earlier quoted context omitted.

Then they should cease being in business.

Couldn't the same argument be made for restaurants? If they can't afford delivery fees, or can't afford to make money without delivery they shouldn't be in business either.

This is true so long as you recognize that this is a change in the market that will make certain restaurants unprofitable. A restaurant that was financially well-off before the advent of 3rd party delivery apps may not be anymore because they have fiercer competition.

Restaurants that can absorb the 25-30% hit, for whatever reason, now have an advantage over those that couldn't. The question becomes is this a market failure that needs corrected, or the natural evolution of the food service industry? The case for the former is that you have a vibrant market of pretty high quality restaurants run by their owners as passion projects and have margins that keep the lights on. Squeezing this market because it's now "deliver or die" means that they'll either have to go out of business or reduce their costs which hurts the customer with second order effects -- they will have to reduce their rents by going to a cheaper location that's out of the way, the quality of the food will drop, and/or the staff will be squeezed.

I don't necessarily agree with capping the fee but I don't think supply-chain transparency ever hurt the customer.

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

#339

Post by sub7 »

I can't believe all the crypto hype has led us to bogus "defi" ponzis instead of a widely adopted protocol for transport and delivery that cuts out these middlemen idiots.

Oh and ticketing too, venues and artists pay an absurd amount to Ticketmaster etc. Needs to stop.

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