Whack one mole and another pops up. This is a nice start but the fees will just be called something else. I don't know what can fix this issue effectively.
Magically lowering the cost of delivering food would do it.
San Francisco permanently caps delivery app fees for restaurants at 15%
41–50 of 84 posts
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#42In the ideal scenario the apps are routing a new customer to you, handling taking the order and payment, picking up the food, and delivering it. That seems like it could be worth more than 15% to the restaurant.
People say these apps have fees that are too high, but they are not profitable, they're actually charging too little. The main issue is that people are extremely price sensitive when it comes to food delivery, which leads to these companies employing every trick in the book (hidden fees, service fees, delivery fees, tips, promotions, %-based charging etc) to stay competitive. I would prefer some regulation is how this is managed to enforce more transparency.
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#43It would be better to cap the transaction fee that goes to the (tech) middleman, as a percentage of the bona fide delivery fee that gets paid to the deliveryperson. If a pizza costs $25, a traditional delivery fee/tip adds another $10, and Uber charges $50 total, that is an additional 150% surcharge for simply running a website!
"Simply running a website" may be harder than you think compared with transporting food.
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#44Lots of the commenters seem to think (as I did before reading the article) that this is capping how much delivery services can charge the customer, but it's actually about how much they can charge the restaurants. This distinction actually makes some sense because the former is explicit and the latter is hidden.
I don't love delivery fees and practically never have food delivered, but I would not want to see the customer-facing fees capped. They are explicit fees, and people can choose to pay them or not to have food delivered.
The thing that is being capped here is more opaque — it's the fee the delivery service charges the restaurant. This fee results in the restaurant raising the price of food (which in turn increases this fee slightly).
This price adjustment is not transparent to the customer, so I'm more open to having it be regulated. I would prefer that instead of capping the fee, that it be made transparent.
That way the information is out in the open and everyone can make their decisions with a full understanding of whom is being charged what.
Also, this rule has not been finalized yet — there's apparently another vote remaining.
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#45This is irrelevant. The delivery companies will just increase the prices of the items, or charge Service Fees, or charge Temporary Local Fees, or charge Taxes. UberEats does exactly this in each of those transactional labels already. And let's not forget the driver tip which often defaults to a percentage of the sum() of the above items.
This is the point, most of these apps have a clause that caps their price in the app to the price in person (e.g. Uber[1]). This means that the restaurant is either eating the fees directly or it must just simply not sell on the platform. This should be fine during normal times, no one is forcing you to sell via Uber Eats, but it is abhorrent during the pandemic.
I think the proper way to legislate here was to make such clauses illegal: restaurants should be able to price based on whether it is dine-in, pick up or delivery.
[1] 5.6 Pricing. in https://www.uber.com/legal/fr-ca/document/?name=uber-eats-me...
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#46When you compare the pre internet method of advertising, where the restaurants paid gobs of money to radio stations and periodicals to run an ad with no guarantee of any result, no one thought that had to be capped. Wonder what the typical ad spend was as a proportion of sales, not even considering the risk and difficulty of tracking results.
I'm not a fan of advertising, but at least money spent on promoting your business build your brand and in theory you should benefit from that in the long term.
It seems that restaurants don't have clients these days and are at mercy of delivery companies which, at least some of them, employ hostile tactics to hijack any attempt to contact restaurants directly.
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#47It would be better to cap the transaction fee that goes to the (tech) middleman, as a percentage of the bona fide delivery fee that gets paid to the deliveryperson. If a pizza costs $25, a traditional delivery fee/tip adds another $10, and Uber charges $50 total, that is an additional 150% surcharge for simply running a website!
"Simply running a website" may be harder than you think compared with transporting food.
Transporting food takes a person's real time, gas, and wear on a vehicle, for every trip. Running a website is straightforwardly scalable to millions of customers.
In my example (which is based on real prices I experienced when I received an Uber gift card), a $2 fee (20% on top of the usual $10 delivery charges) seems more than enough to cover that.
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#48Earlier quoted context omitted.
> Food delivery startups: Hey we'll handle delivery for you for a fee, sounds good? > Restaurants: Ok! / No, thanks. How is this exploitation? Please.
https://ilsr.org/biting-back-delivery-apps-are-gobbling-up-r... https://ilsr.org/wp-content/uploads/2021/05/ILSR_SpecialDeli... https://thecounter.org/grubhub-domain-purchases-thousands-sh... https://www.eater.com/22228352/convenience-of-delivery-apps-... https://www.economicliberties.us/our-work/rescuing-restauran... https://www.nytimes.com/2020/06/09/technology/delivery-apps-...
Exactly the point - when apps charge too much, people will complain and alternatives will arise.
From your second source: > "Dozens of locally owned services are proving there's a better alternative"
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#49In the ideal scenario the apps are routing a new customer to you, handling taking the order and payment, picking up the food, and delivering it. That seems like it could be worth more than 15% to the restaurant. People say these apps have fees that are too high, but they are not profitable, they're actually charging too little. The main issue is that people are extremely price sensitive when it comes to food delivery…
This is one situation where I really struggle to understand calls for regulation. Food is one of the most competitive industries. If the all-in price for my Uber Eats is too expensive, then I go with an alternative (direct order, take out, cook myself).
I think any good proprietor would break out the fees, but why does this need to be regulated?
Re: San Francisco permanently caps delivery app fees for restaurants at 15%
#50Lots of the commenters seem to think (as I did before reading the article) that this is capping how much delivery services can charge the customer, but it's actually about how much they can charge the restaurants. This distinction actually makes some sense because the former is explicit and the latter is hidden. I don't love delivery fees and practically never have food delivered, but I would not want to see the cust…
I don't disagree exactly. On the other hand, restaurants pay lots of service providers money--albeit not typically pegged to the price of a meal. So there's no real transparency to what "your" money is going to.