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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

#151

Post by bmmayer1 »

inkaudio wrote: post #99

This is a regulatory response to Silicon Valley’s implementation of predatory pricing. Let me explain: Predatory pricing is defined as “the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.” For silicon valley startups like Doordash and Grubhub this is accomplished by acquiring customers at a significant loss in ways that may often seem idiotic. e…

Isn't this a price cap, to prevent prices from getting too high? What does that do to protect against prices that are too low?

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

#152

Post by ryan_lane »

bootlooped wrote: post #73
iso1631 wrote: post #19

Earlier quoted context omitted.

I've had delivery takeaways in British towns and cities for 2 decades, well before the likes of ubereats and deliveroo. Those companies do their own deliveries and manage to make enough money to not even charge more for delivery (or offer a collection discount) - although usually a minimum cost of say £20. Why can't VC companies do it that efficently?

Individual restaurants don't do many of the things delivery app companies do: offer an multiplatform app, have a sales team, 401k matching, expensive MBAs, software engineers, and lawyers, etc... A lot of overhead, and how can they really save money? Compare that stuff to just hiring a delivery person for near minimum wage.

Often the person doing deliveries also does other work in the restaurant when there's no deliveries to do. They clean, fold napkins/silverware, etc. The delivery person probably makes more money than an uber eats driver, and it almost certainly costs the restaurant less.

Yeah, it's less convenient for consumers, but at least it won't drive your favorite restaurant out of business.

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

#153

Post by muststopmyths »

discopicante wrote: post #49

This reminds me of Ticketmaster vs. Pearl Jam in the 90s where the band exposed that Ticketmaster takes a much bigger cut that ticket holders didn't see in addition to a small 'ticket fee' that the ticket holder did see. I remember during that time that the general consensus from music fans was that Ticketmaster was an evil and greedy company. Restaurant customers really need to change their perceptions and understan…

>I remember during that time that the general consensus from music fans was that Ticketmaster was an evil and greedy company.

Sure, but it didn't translate into anything concrete. Pearl Jam suffered a lot by not being able to book major concert venues and pretty much stopped touring for a while. Ticketmaster went on to bigger and better things to where it's pretty much the only game in town for most artists/concert venues.

As video game pricing has shown, consumers don't give a shit about fair value when it comes right down to it.

What's really needed for the restaurant industry is for a co-op model where a bunch of restaurants in a city/locality pool together their resources to hire a fleet of delivery drivers and a common ordering platform.

A simple online-ordering system, plus a map that shows the location of the driver is all that's really needed. Craigslist makes tens of millions with a minimalist interface. No reason why you couldn't build a relatively cheap site like that for this co-op model.

Unfortunately no one has the incentive to build this platform for them. Because you can't return billions to your VCs this way.

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

#154

Post by tonyarkles »

vorpalhex wrote: post #127
tonyarkles wrote: post #55

Earlier quoted context omitted.

There’s a really interesting liability question that comes along with that. If I order food from a restaurant via a delivery service that has no contractual relationship with them, and happen to get sick, who’s on the hook for that? I, legally, have no business relationship with the restaurant in that circumstance.

Not a lawyer but in this case it seems like the delivery company is placing the actual end order with the restaurant on your behalf and is acting as the proxy, so any issues you would take up with the delivery company. The delivery company may or may not have the ability to rectify issues at the end of the month with the restaurant depending on their relationship.

Yeah, agree. And in the case of the companies that are reselling restaurant food without the restaurant’s permission/agreement, the “delivery” company is probably on the hook.

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

#155

Post by admax88q »

ceejayoz wrote: post #139
admax88q wrote: post #105

Earlier quoted context omitted.

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.

What? Are we reading the same article? As far as I can tell this new rule caps fees at 10%, it doesn't say anything about charging whatever they want, while being more transparent or disclosing the fees more clearly.

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

#156

Post by door99 »

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.

> I disagree with this move. Why should we force a cap rather than let market competition improve prices?

Because the demand for delivery services on behalf of restaurants is inelastic right now -- they are relying on delivery for their revenue, and it's difficult to manage that in-house. This leads to price gouging.

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

#157

Post by butterfi »

deelowe wrote: post #148
MisterTea wrote: post #143

Earlier quoted context omitted.

> The End game is to be the dominant food ordering platform in any given town where you get to dictate rates like 25%. You fight back by calling your order in and having them deliver it or pick it up yourself. I do this 99%* of the time as I refuse to pay a web server $8+ order+delivery fee for a meal that costs the same. It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks…

In my experience, most restaurant staff get super upset about this -- especially if you ask them to bring your order out. Restaurant owners need to be more clear with their staff about needing to support this.

I have not experienced this at all. If anything, restaurants has been appreciative I picked it up because they made more money from the sale.

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

#158

Post by ceejayoz »

deelowe wrote: post #148
MisterTea wrote: post #143

Earlier quoted context omitted.

> The End game is to be the dominant food ordering platform in any given town where you get to dictate rates like 25%. You fight back by calling your order in and having them deliver it or pick it up yourself. I do this 99%* of the time as I refuse to pay a web server $8+ order+delivery fee for a meal that costs the same. It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks…

In my experience, most restaurant staff get super upset about this -- especially if you ask them to bring your order out. Restaurant owners need to be more clear with their staff about needing to support this.

I've never had a restaurant employee get upset about taking a take-out order.

They'd likely expect a couple bucks tip for a curbside pickup, though.

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

#159

Post by SwiftyBug »

empath75 wrote: post #50
gmadsen wrote: post #36

Earlier quoted context omitted.

drivers bringing restaurant food to individual houses doesn't really seem like something that scale helps. More people using the service requires more drivers.

It could scale if there's enough people ordering food from the same geographic location to the same geographic location at around the same time. Imagine a bunch of ghost kitchens next to each other in an industrial park, offering discounts to certain neighborhoods if they agree to order in a certain time frame.

Brazilian iFood already does this. You can order a 1.85 USD meal (with no extra fees) a day in advance. It arrives at a predefined time in a generic iFood package. I've never seen such an unappetizing dish in my life, including what I've seen children be fed in a really poor orphanage I used to volunteer in. I really hate the distopic future we're heading into.

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

#160

Post by _sbrk »

inkaudio wrote: post #99

This is a regulatory response to Silicon Valley’s implementation of predatory pricing. Let me explain: Predatory pricing is defined as “the pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.” For silicon valley startups like Doordash and Grubhub this is accomplished by acquiring customers at a significant loss in ways that may often seem idiotic. e…

"Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims."

Which means that predatory pricing rarely, if ever, exists.

If you don't like the 25% delivery fee, GET OFF YOUR ASS AND GO GET YOUR OWN FOOD.

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