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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

#411

Post by missedthecue »

criddell wrote: post #200
Proven wrote: post #72

Earlier quoted context omitted.

The socialist busybodies in Portland want to "do something", so apart from rendering these businesses unprofitable, they are also going to put more of the relatively less skilled workers out of work, while at the same time lower the quality of life for consumers who will now be forced to find less convenient or more expensive ways to eat.

The cap can be adjusted or even removed down the line. Maybe 10% is too low, too high, or maybe it's just right. It's an experiment worth trying.

Nothing is as permanent as a temporary government measure

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

#412

Post by bofadeez »

raz32dust wrote: post #405
Reedx wrote: post #305

Earlier quoted context omitted.

Exactly what happened in SF. Uber Eats stopped delivering to Treasure Island as a result: "The Order limits our ability to cover operation costs, so we have had to revise the areas Uber Eats can deliver to in the city. Unfortunately, this means we cannot continue to serve customers in Treasure Island. The Mayor’s Emergency Order limits the commissions we charge restaurants for access to our platform and delivery serv…

That makes no sense to me. Why can't they charge people ordering from Treasure island higher?

Because the city made it illegal, obviously. Just like Portland. They're not going to operate at a loss. All you're doing is criminalizing deliveries that cost more than 10%.

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

#413

Post by dmix »

SheinhardtWigCo wrote: post #407
boring_twenties wrote: post #397

Earlier quoted context omitted.

Doordash seems to have higher menu prices than the restaurants' own websites, so unless I'm missing something, it seems the restaurant has the ability to choose to recoup those fees from the customer if they want to. What gets me is that Doordash is triple dipping here. There's the fee to the restaurant, which may or may not translate to higher menu item prices. There's the fixed $2-5 delivery fee which is pretty obv…

There's also the 15-20% tip, of which the restaurant staff aren't getting a cent.

Don't you normally tip the driver for deliveries? I've never tipped a restaurant for take out or delivery normally...

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

#414

Post by Rebelgecko »

raz32dust wrote: post #405
Reedx wrote: post #305

Earlier quoted context omitted.

Exactly what happened in SF. Uber Eats stopped delivering to Treasure Island as a result: "The Order limits our ability to cover operation costs, so we have had to revise the areas Uber Eats can deliver to in the city. Unfortunately, this means we cannot continue to serve customers in Treasure Island. The Mayor’s Emergency Order limits the commissions we charge restaurants for access to our platform and delivery serv…

That makes no sense to me. Why can't they charge people ordering from Treasure island higher?

Some semi-related reasons I can think of

1. If people knew what it actually cost to get food delivered (as opposed to hiding the delivery fee by increasing per item costs or charging the restaurant a cut), they wouldn't order

2. Part of their business model is to waive delivery fees, like if you buy the subscription for unlimited delivery. However even if you have unlimited delivery they still make money from service fees and restaurant commissions. If all of that cost gets charged as a "delivery fee", the $20 subscription for unlimited free delivery becomes unsustainable.

3. As others have mentioned, they're probably doing it in part just to make a point

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

#415

Post by orangecat »

nitrogen wrote: post #402
Reedx wrote: post #305

Earlier quoted context omitted.

Exactly what happened in SF. Uber Eats stopped delivering to Treasure Island as a result: "The Order limits our ability to cover operation costs, so we have had to revise the areas Uber Eats can deliver to in the city. Unfortunately, this means we cannot continue to serve customers in Treasure Island. The Mayor’s Emergency Order limits the commissions we charge restaurants for access to our platform and delivery serv…

To some extent this seems like grandstanding. They charge a delivery fee. If the delivery fee doesn't cover delivery, then charge a higher delivery fee. That comes from the customer, not the restaurant.

* If the delivery fee doesn't cover delivery, then charge a higher delivery fee.*

Why doesn't that reasoning apply to restaurants? If the fees cut into their profits too much, then they need to raise prices.

There is no free lunch here (ha!). The customer is always going to be paying for both the food and the delivery. There's no benefit in micromanaging the internal transactions.

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

#416

Post by 8ytecoder »

nitrogen wrote: post #402
Reedx wrote: post #305

Earlier quoted context omitted.

Exactly what happened in SF. Uber Eats stopped delivering to Treasure Island as a result: "The Order limits our ability to cover operation costs, so we have had to revise the areas Uber Eats can deliver to in the city. Unfortunately, this means we cannot continue to serve customers in Treasure Island. The Mayor’s Emergency Order limits the commissions we charge restaurants for access to our platform and delivery serv…

To some extent this seems like grandstanding. They charge a delivery fee. If the delivery fee doesn't cover delivery, then charge a higher delivery fee. That comes from the customer, not the restaurant.

And base that delivery fee on distance between the restaurant and the customer as well. They can solve it they want to. People in treasure might be willing to pay a higher fee than to not get any delivery at all. It’s political posturing and pressure tactics.

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

#417

Post by raz32dust »

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?

> Why have all these restaurants signed up if 25% is so unfair?

Here is my impression of the problem: Say the restaurant was taking $10 for each order, making $3 in profit per order. i.e, cost is $7.

Before delivery apps: 100 orders/day. Total profit $300.

After delivery apps: 200 orders/day, cost $7, sale $7.5 (-25% fee), $0.5 profit per order. Total profit $150.

After delivery apps, if you don't sign up for the app and agree to their 25% fee: 50 orders (because people are mostly using the app now), total profit $150.

If true, it is a lose-lose for restaurants. Their profit margin is going down either way. On top of that their costs are likely going up, since they have to serve more orders.

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

#419

Post by 8ytecoder »

orangecat wrote: post #415
nitrogen wrote: post #402

Earlier quoted context omitted.

To some extent this seems like grandstanding. They charge a delivery fee. If the delivery fee doesn't cover delivery, then charge a higher delivery fee. That comes from the customer, not the restaurant.

* If the delivery fee doesn't cover delivery, then charge a higher delivery fee.* Why doesn't that reasoning apply to restaurants? If the fees cut into their profits too much, then they need to raise prices. There is no free lunch here (ha!). The customer is always going to be paying for both the food and the delivery. There's no benefit in micromanaging the internal transactions.

I’d wager they have clauses that prevent them from charging a lower price for direct customers. In which case the restaurant has to charge everyone a higher price. In what world does that benefit anyone but the intermediaries?

It’s the exact same as credit card processing fees. Except that’s 3% and this is 30%

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

#420

Post by rootusrootus »

orangecat wrote: post #415
nitrogen wrote: post #402

Earlier quoted context omitted.

To some extent this seems like grandstanding. They charge a delivery fee. If the delivery fee doesn't cover delivery, then charge a higher delivery fee. That comes from the customer, not the restaurant.

* If the delivery fee doesn't cover delivery, then charge a higher delivery fee.* Why doesn't that reasoning apply to restaurants? If the fees cut into their profits too much, then they need to raise prices. There is no free lunch here (ha!). The customer is always going to be paying for both the food and the delivery. There's no benefit in micromanaging the internal transactions.

> Why doesn't that reasoning apply to restaurants?

More opaque. The honest approach would be for the menu prices to be the menu prices, and the cost of the delivery should be obvious.

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