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

#131

Post by treis » Thu, Jul 09, 2020, 2:22 PM UTC

chrisseaton wrote: post #94

treis wrote: post #69

Earlier quoted context omitted.

It's falsifying the restaurants prices. Grubhub shouldn't be able to say a dish costs $15 when it actually costs $10. It's a false statement that harms the restaurant. Sure, they will get some deliveries but what about the people that would buy at $10 but not $15? And what about the people that won't dine in because they think prices are 50% higher than they are. GrubHub is skimming valuable customers while discardin…

> It's falsifying the restaurants prices. It's marking them up... yeah. Is that a problem? Do you realise when you go to a store all the products are 'falsified' by marking them up on top of what the producer sells them to the retailer for?

No, because since the beginning of retail stores that is how it has worked and everyone understands that. For food delivery it has always been that you buy from the restaurant and pay menu price + delivery charge. Grubhub et.al. have come along and used that understanding along with an implied relationship to the restaurant to deceive the customer.

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

#132

Post by ceejayoz » Thu, Jul 09, 2020, 2:23 PM UTC

spideymans wrote: post #113

jfengel wrote: post #53

Earlier quoted context omitted.

It's doubtful that these services are actually spending 25% of each food order on providing the service. The money goes to expansion, marketing, loss leaders, and other supposedly temporary overhead. They're hoping that when they reach scale and have eliminated competitors, they'll turn a tidy profit, the way Amazon did. It's not at all clear that they really need to spend that much money on their expansion or that t…

Also these delivery services effectively provide advertising for the restaurants. If you’re not on the platform, you might as well be invisible.

That's solving a problem they themselves created, though.

People were able to find restaurants and place take-out orders before these apps existed. It's just harder now because these apps have spent big on SEO and marketing to push them down the search result list.

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

#133

Post by ryan_lane » Thu, Jul 09, 2020, 2:23 PM UTC

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?

I'm not sure how this law is a problem. There's nothing saying that the delivery services can't increase their delivery fee to make up for the amount they're skimming from the restaurant. The restaurants have a hard time competing if they don't offer delivery, but they make little to no money off the deliveries due to the high fees.

The delivery companies hide their true costs by making the delivery fee seem cheap. This law simply shows the true cost of the service to customers.

If the only way these companies can survive is by leeching money from restaurants with extremely slim margins, they simply shouldn't exist.

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

#134

Post by switch007 » Thu, Jul 09, 2020, 2:23 PM UTC

colinmhayes wrote: post #123

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…

I don't understand why people in central areas of the city order delivery. There are 10 amazing restaurants within easy walking distance of me, why order delivery when I can walk for 5 minutes instead?

Depression, chronic fatigue, disabilities, anxiety...?

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

#135

Post by [deleted] » Thu, Jul 09, 2020, 2:23 PM UTC

cocoa19 wrote: post #93

I disagree with this move. Why should we force a cap rather than let market competition improve prices? I believe it's better to fix shady practices. If I pay 25% to Uber, I want to know I paid 25% to them and not the restaurant. Then I can decide if the time savings is worth that 25% or not.

[deleted]

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

#136

Post by dubcanada » Thu, Jul 09, 2020, 2:24 PM UTC

giarc wrote: post #97

Slix wrote: post #66

I feel super guilty ordering from food delivery apps. But I seem to have no choice if I want delivery.

I'm in the same boat. I was even given a large gift card recently for SkiptheDishes (Canadian food delivery app) by co-workers so I'm forced to use it. I want to support local restaurants, but I'm starting to question whether my order is actually a lose for them. I read this article and actually looked up my city councillor and emailed him. I asked if council had considered this and told him I would support this type…

No your order is not a loss. Just because Skipthedishes takes 30% does not mean you placing an order is losing the restaurant money.

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

#137

Post by occamrazor » Thu, Jul 09, 2020, 2:24 PM UTC

treis wrote: post #69

chrisseaton wrote: post #42

Earlier quoted context omitted.

So the restaurants are getting the option of delivery and the increased customer base and advertising... for absolutely no change to themselves? And the customers who use delivery are the ones paying for it? And if they don't want to pay it they can still go straight to the restaurant who will again make the same money? Sounds like a win to absolutely everyone involved. What is everyone's problem? Why do we want to i…

It's falsifying the restaurants prices. Grubhub shouldn't be able to say a dish costs $15 when it actually costs $10. It's a false statement that harms the restaurant. Sure, they will get some deliveries but what about the people that would buy at $10 but not $15? And what about the people that won't dine in because they think prices are 50% higher than they are. GrubHub is skimming valuable customers while discardin…

It is unethical only if Grubhub says “I will deliver joe’s 12$ burger to you for a 4$ delivery fee” when the burger costs actually 9$. There’s nothing wrong if they say “I will bring you Joe’s burger for 16$ including delivery.”

In general we don’t expect resellers to reveal their cost of goods sold.

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

#138

Post by neotriple » Thu, Jul 09, 2020, 2:24 PM UTC

cocoa19 wrote: post #104

cocoa19 wrote: post #93

I disagree with this move. Why should we force a cap rather than let market competition improve prices? I believe it's better to fix shady practices. If I pay 25% to Uber, I want to know I paid 25% to them and not the restaurant. Then I can decide if the time savings is worth that 25% or not.

In addition, food delivery is not a basic need, it's a luxury. If a luxury delivery service drives Lamborghinis and charge 200 to wealthy people, so be it. If a Toyota Corolla wants to charge up to 25% for your local pasta restaurant, so be it.

This cap is only in effect during and up to 90 days after the current state of emergency; this isn’t forever.

One can argue that food delivery isn’t really just a “luxury,” but probably best in terms of preventing spread during the coronavirus pandemic.

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

#139

Post by ceejayoz » Thu, Jul 09, 2020, 2:24 PM UTC

admax88q wrote: post #105

castlecrasher2 wrote: post #70

Earlier quoted context omitted.

>What is everyone's problem? Why do we want to interfere with this? Because customers who order through Grubhub/Doordash blame the restaurant for issues such as high prices and wrong orders instead of Grubhub/Doordash. So on one hand, the restaurant gets increased business but on the other they never interact with the customer directly and so their business' reputation depends on Grubhub/Doordash/etc to not fuck up,…

That's a messaging/marketing issue, which we regulate all the time. It would be better and fairer to legislate that GrubHub and others must be clear about where their pricing comes from rather than legislating what their prices should be.

That's what this does.

They can still charge whatever they want for their fee. They just can't hide their fee in the list price of your sushi.

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

#140

Post by flerchin » Thu, Jul 09, 2020, 2:25 PM UTC

colinmhayes wrote: post #123

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…

I don't understand why people in central areas of the city order delivery. There are 10 amazing restaurants within easy walking distance of me, why order delivery when I can walk for 5 minutes instead?

Sick in your apt with covid for one.