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

#451

Post by donarb » Thu, Jul 09, 2020, 9:00 PM UTC

carlmr wrote: post #218

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…

How about you have to charge the fee to the customer. The issue isn't taking 25%. It's taking 25% from the restaurant, which means they don't have a profit margin left. If for example the pizza is $10 at the restaurant, make that $12.50 with delivery and $10 without. That way the consumer can decide themselves if they want to pay the added amount for delivery, or if they'd rather walk/drive. Right now they charge you…

The ChowNow app doesn't handle delivery, only online ordering. If the restaurant delivers, they do it themselves. The nice thing about ChowNow is that they just charge a monthly fee to the restaurant, plus any credit card fees. More affordable for the restaurant than a 30% cut of each order.

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

#452

Post by mikeg8 » Thu, Jul 09, 2020, 9:03 PM UTC

chrisseaton wrote: post #445

mikeg8 wrote: post #391

Earlier quoted context omitted.

A restaurant is a brand and a brand gets to determine the pricing of their products. Pricing is one of the ways customers relate to the brand's identity. Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is unethical, period. These delivery services should really be increasing their delivery fees to cover their costs, but they know…

> A restaurant is a brand and a brand gets to determine the pricing of their products. But that’s just not true. Branded products vary in price on different retailers. A can of Coca-Cola can be wildly different prices in different places. Are you not used to this as a consumer? > Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is…

I am very aware of how wholesale and retail pricing works - but that is a very different distribution channel, and customers enter supermarkets and department stores well aware of this. Restaurant pricing is based on (with maybe some outlying exceptions) a direct-to-consumer distribution model - something you seem be be having an impossible time understanding. I'm fine with delivery companies marking up the prices - as long as they are transparent about it - which they are not. it's deceitful to the customer experience, and I think you are intentionally playing dumb here.

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

#453

Post by [deleted] » Thu, Jul 09, 2020, 9:04 PM UTC

root_axis wrote: post #365

chrisseaton wrote: post #304

Earlier quoted context omitted.

> If a delivery company charges me 70 dollars to deliver a flat screen tv that's fine, but if they charge me 70 dollars but also markup the price of the TV 25% I'd consider that pretty dishonest and would at least want to know that I have the option to save 25% by managing delivery on my own. ...but this is exactly how other industries already work and everyone's fine with it! When you buy a TV from Amazon they both…

Amazon is a marketplace not a delivery service. It is expected that you might pay different prices in different marketplaces, it's not expected that a delivery service would charge you a delivery fee and a markup on the cost of the product that you're buying - that is not normal.

[deleted]

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

#454

Post by heisenbit » Thu, Jul 09, 2020, 9:05 PM UTC

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…

/s is missing.

There is this misconception that the absence of regulation is bad. But that is not true for sane appropriate rules. Absence of public rules is not a vacuum of rules but a universe where rules are made by the strongest.

Also laws do often not prescribe details but empower regulators to manage the details. There may be laws against predatory pricing. There is also case laws against predatory pricing. But markets also evolved and it us extremely costly and time consuming to prosecute monopoly cases based on principles (read up on e.g. the case against IBM way back). It is more efficient to put in place industry specific rules which then can be enforced with much simpler reasoning.

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

#455

Post by ceejayoz » Thu, Jul 09, 2020, 9:07 PM UTC

valuearb wrote: post #448

ceejayoz wrote: post #378

Earlier quoted context omitted.

Healthcare premiums were steadily marching higher from the 1970s onwards, and continued to do so post-ACA at about the same annual growth rate.

Almost in perfect correlation as one by one pre-existing condition limits were legislatively banned over the years. And ACA eliminated almost all remaining pre-existing conditions, so of course it drove insurance costs and pricing sky high.

Except it didn't.

See Exhibit 1 at https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018..... The "sky high" jump you portray doesn't exist. It's been a quite steady annual rise.

If pre-existing conditions were the primary cause for premium increases, the ACA's one-fell-swoop removal of them would've had far more significant impact on that chart.

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

#456

Post by eropple » Thu, Jul 09, 2020, 9:12 PM UTC

lotsofpulp wrote: post #291

eropple wrote: post #273

Earlier quoted context omitted.

"The solution is high-resistance individual actions to address a situation with no societal benefit created by a company with more money than you can even begin to visualize." This is the sort of thing one says to either feel very, very clever about themselves or because they don't want things fixed . Which is it?

I don’t consider using a browser or google maps or Apple Maps to search name and phone number of a restaurant to be high resistance. If people want to give their money to middlemen because they are too lazy to call or use a search website, that is their problem. We don’t need laws around every single idiotic behavior people do, and if they find value in paying an app maker an extra $10, so be it. I’ll continue to do…

Apple Maps returns results from Yelp, which sometimes have GrubHub's interposed phone numbers in them. So your very own solution doesn't work.

You are falling for the okeydoke.

Break these assholes' backs and we are all in a better place.

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

#457

Post by andrewla » Thu, Jul 09, 2020, 9:16 PM UTC

heisenbit wrote: post #454

andrewla wrote: post #301

Earlier quoted context omitted.

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…

/s is missing. There is this misconception that the absence of regulation is bad. But that is not true for sane appropriate rules. Absence of public rules is not a vacuum of rules but a universe where rules are made by the strongest. Also laws do often not prescribe details but empower regulators to manage the details. There may be laws against predatory pricing. There is also case laws against predatory pricing. But…

> It is more efficient to put in place industry specific rules which then can be enforced with much simpler reasoning.

I could not disagree more strongly. If you could point me to a rule that meets these criteria I'd love to see them -- all the rules that I've had to deal with in my professional life have been contrived to benefit the small number of companies actually capable of complying with them, rather than supporting the end goal of the regulation directly, and most of the time, allowed sufficiently large players to circumvent them entirely.

Antitrust legislation is hard to enforce, costly and time consuming, as you say, but it should be hard, and it should be time consuming, because the alternative is that you outsource the hard and time consuming parts to the industry, which is just "weaponizing the complexity" -- the cost to comply does not scale linearly with the benefits, so small players are just wiped off of the board.

(Note: I think you got confused with the double negatives in your first sentence -- you say "There is this misconception that the absence of regulation is bad" but I think you mean "There is this misconception that regulation is bad" or "There is this misconception that the absence of regulation is good". Not that I agree with you, but the rest of your post argues for sane regulation rather than deregulation)

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

#458

Post by chrisseaton » Thu, Jul 09, 2020, 9:17 PM UTC

mikeg8 wrote: post #452

chrisseaton wrote: post #445

Earlier quoted context omitted.

> A restaurant is a brand and a brand gets to determine the pricing of their products. But that’s just not true. Branded products vary in price on different retailers. A can of Coca-Cola can be wildly different prices in different places. Are you not used to this as a consumer? > Having a 3rd party, which may still add value to both the brand and end-user, interject and abstract from the brand's determined prices is…

I am very aware of how wholesale and retail pricing works - but that is a very different distribution channel, and customers enter supermarkets and department stores well aware of this. Restaurant pricing is based on (with maybe some outlying exceptions) a direct-to-consumer distribution model - something you seem be be having an impossible time understanding. I'm fine with delivery companies marking up the prices -…

> I think you are intentionally playing dumb here

I think everyone else is playing dumb!

They're telling me they're shocked that a business would mark up a product they buy from someone else to re-sell? And I think it's a bit off they're calling it 'unethical'. It's no different to what other companies do all the time and people consider it acceptable and the only distinction is the label of delivery/retailer?

The restaurants do it themselves! They resell wine with their own markup plus charge a service fee!

Also, this is a luxury product we're talking about - restaurant food delivered to you home. Why are people so aghast that they're having to pay a marked-up premium for it?

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

#459

Post by darth_avocado » Thu, Jul 09, 2020, 9:19 PM UTC

carlmr wrote: post #218

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…

How about you have to charge the fee to the customer. The issue isn't taking 25%. It's taking 25% from the restaurant, which means they don't have a profit margin left. If for example the pizza is $10 at the restaurant, make that $12.50 with delivery and $10 without. That way the consumer can decide themselves if they want to pay the added amount for delivery, or if they'd rather walk/drive. Right now they charge you…

How much more extra do you think customers will pay? There is already a $15 minimum on most apps. There is the 15% flat service fee they charge customers. Then there is the delivery fee that can range from $0.99 to $7.99. Then there's the tips. And to top it off, the apps charge the restaurant as well. Sometimes as high as 25%. If you shift these costs to the customers, its almost a 50-60% premium. I don't think their business will survive.

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

#460

Post by heisenbit » Thu, Jul 09, 2020, 9:28 PM UTC

andrewla wrote: post #457

heisenbit wrote: post #454

Earlier quoted context omitted.

/s is missing. There is this misconception that the absence of regulation is bad. But that is not true for sane appropriate rules. Absence of public rules is not a vacuum of rules but a universe where rules are made by the strongest. Also laws do often not prescribe details but empower regulators to manage the details. There may be laws against predatory pricing. There is also case laws against predatory pricing. But…

> It is more efficient to put in place industry specific rules which then can be enforced with much simpler reasoning. I could not disagree more strongly. If you could point me to a rule that meets these criteria I'd love to see them -- all the rules that I've had to deal with in my professional life have been contrived to benefit the small number of companies actually capable of complying with them, rather than supp…

Rules e.g. establish markets and enable competition: Standard screws or standard contracts. The absence of basic rules like disclosure of service prices is doubling the cost of US health care. Other rules force the airlines to compete on services and price but not on safety.