San Francisco permanently caps delivery app fees for restaurants at 15% • Hacker News Board

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#11

Post by cryptofistMonk » Wed, Jun 23, 2021, 6:03 PM UTC

standardUser wrote: post #8

cryptofistMonk wrote: post #6

The restriction may have made sense during a pandemic, but long term this really seems like something for markets, rather than governments, to solve

The fact that there are many apps competing for this businesses, but the costs to the restaurants are still so high, seems suspicious to me.

Delivery is expensive and network effects are valuable.

Price-fixing is already illegal

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#12

Post by ojbyrne » Wed, Jun 23, 2021, 6:04 PM UTC

standardUser wrote: post #8

cryptofistMonk wrote: post #6

The restriction may have made sense during a pandemic, but long term this really seems like something for markets, rather than governments, to solve

The fact that there are many apps competing for this businesses, but the costs to the restaurants are still so high, seems suspicious to me.

I would guess that is because the cost of delivery is very high.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#13

Post by adkadskhj » Wed, Jun 23, 2021, 6:05 PM UTC

standardUser wrote: post #8

cryptofistMonk wrote: post #6

The restriction may have made sense during a pandemic, but long term this really seems like something for markets, rather than governments, to solve

The fact that there are many apps competing for this businesses, but the costs to the restaurants are still so high, seems suspicious to me.

What's suspicious? Isn't it common for the marketplace to avoid competition when possible? Sometimes directly colluding, sometimes indirectly?

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#14

Post by granzymes » Wed, Jun 23, 2021, 6:05 PM UTC

cryptofistMonk wrote: post #6

The restriction may have made sense during a pandemic, but long term this really seems like something for markets, rather than governments, to solve

Not to mention that this just shifts costs to other fees like marketing.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#15

Post by toomuchtodo » Wed, Jun 23, 2021, 6:05 PM UTC

cryptofistMonk wrote: post #11

standardUser wrote: post #8

Earlier quoted context omitted.

The fact that there are many apps competing for this businesses, but the costs to the restaurants are still so high, seems suspicious to me.

Delivery is expensive and network effects are valuable. Price-fixing is already illegal

Delivery platforms can stay solvent due to capital markets longer than restaurants and drivers they exploit. Regulation is required.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#16

Post by methodin » Wed, Jun 23, 2021, 6:06 PM UTC

This is good. Instead of taking profits from restaurants and drivers they'd be forced to be smarter/more agile elsewhere. A lot of restaurants are shook down for participation in the first place where they have no control over the delivery experience so regulating a fee cash cow seems like a good move. Also I don't buy free-market self-regulation at all. It maximizes profits not "for the greater good" things.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#17

Post by throwkeep » Wed, Jun 23, 2021, 6:06 PM UTC

This group of domain experts know what's best and there will be no unintended consequences. It's the perfect permanent solution and 15% is exactly the right number.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#18

Post by dreyfan » Wed, Jun 23, 2021, 6:07 PM UTC

This 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.

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#19

Post by raverbashing » Wed, Jun 23, 2021, 6:07 PM UTC

standardUser wrote: post #7

Do these fees also cover the cost of the deliver driver for the restaurant? Because 15% still seems high, but that might not be a bad deal for the restaurants if it's covering the cost of delivery.

The issue is that the user is charged: (restaurant cost) + (delivery cost) and the restaurant is paid (restaurant cost - 15%) (actually around 25%-30% I think without the cap)

So that fee is more like a commission than an actual fee

Re: San Francisco permanently caps delivery app fees for restaurants at 15%

#20

Post by yuliyp » Wed, Jun 23, 2021, 6:07 PM UTC

This doesn't actually do anything meaningful. It changes the proportion of the fees that are visible to the consumer, but the fees will still be there. They'll show up as regulatory fees or just service fees. At the end of the day someone needs to pay for the delivery service (both the actual delivery, as well as the support infrastructure around it, as well as the platform).