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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

#281

Post by smolder »

MisterTea wrote: post #189
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,

Do you need these services that badly that you're willing to get the government involved? If you don't like the product or the company ethics then don't give them money. The only lesson greed will ever learn from is No Sale.

Getting the government involved is exactly the right solution here, and they could implement a rule to keep things fair at near 0 cost. Our particular government being incompetent is mostly due sabotage by people who stand to gain from its continued incompetence.

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

#282

Post by andrewla »

nathanvanfleet wrote: post #279
andrewla wrote: post #194

Earlier quoted context omitted.

The problem is that this response is in the wrong direction. By forcing prices lower, we guarantee that only over-capitalized predatory businesses can compete in the space. The problem is that consumer advocacy and anti-monopoly are practically the opposite thing. The end result of government action here should be short-term higher prices to the consumer, that reflect the actual cost of operations, rather than lower…

Isn't the 10% cap making the end game of monopoly and higher prices impossible though?

Only if they don't change it in the future in response to "market forces", or if they start charging consumers fees directly or some other workaround and then the city council has to retract this guidance because people are complaining about the higher prices.

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

#283

Post by andrewla »

user5994461 wrote: post #270
andrewla wrote: post #204

Earlier quoted context omitted.

The restaurants have this option, and I frankly have no idea why they don't pass the entire cost of delivery onto the customer. I'm happy to pay a delivery fee, though not everyone will, but the restaurant can strike a balance -- they can choose to raise their prices in general, to fund some of the delivery cost from their direct-ordering and in-person traffic. That's what they're doing anyway, just not being explici…

You don't seem to realize that restaurants already pass the costs of delivery to consumer? Out of a $15 order at a restaurant. There is $5 paying for the food (30% of the price, general practice in the industry). The other $10 are supposed to cover waiters, chefs, service, rent, taxes, profits, etc... But there is no service and no large rent when doing delivery rather than dine in. The extra money should be enough t…

In some ways this is what I find most bothersome about it. The restaurants all want us to order directly from them, but you pay the same prices as if you went through Grubhub or whatever. So if you call them directly, you're not really "helping" them -- you're just subsidizing all the Grubhub people.

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

#284

Post by adrr »

albntomat0 wrote: post #31
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?

A number of anti-competitive business practices, such as offering delivery for restaurants without telling them. Previous discussion: https://news.ycombinator.com/item?id=23216852

I don't see how that is anti-competitive. I buy my favorite sandwiches through these services because the deli doesn't offer delivery services. They are providing me with a service and i am paying for it higher prices and a delivery fee. Deli still gets the same amount of money if i walked in and bought it. Its like expedited passport services where you pay someone to go stand at the passport office line instead of doing it yourself. No one calls those services anti-competitive.

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

#285

Post by MisterTea »

briandear wrote: post #252
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…

> It's absurd to think that people are so lazy that they cant pick up a phone or walk a few blocks/cycle/drive to get their meal. You don’t have kids. Calling me lazy because I don’t have time to load up for small children in the car to drive a few miles then have to wait 0-25 minutes — potentially having to get out of the car and unloading said four kids to pick up the food, then reloading them to return home. Such…

> You don’t have kids. Calling me lazy because I don’t have time to load up for small children in the car to drive a few miles then have to wait 0-25 minutes

My mother did that all day long when we were children.

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

#286

Post by gerbal »

andrewla wrote: post #204
raverbashing wrote: post #181

Earlier quoted context omitted.

The 25% delivery fee is fine as long as it's explicitly charged to the consumer and not charged as commission from the "restaurant cost" I have no qualms if I order on the system and it shows, let's say: - Pizza: $15 - Delivery fee: $9 And the entirety of the $15 goes to the restaurant But that doesn't seem to be happening

The restaurants have this option, and I frankly have no idea why they don't pass the entire cost of delivery onto the customer. I'm happy to pay a delivery fee, though not everyone will, but the restaurant can strike a balance -- they can choose to raise their prices in general, to fund some of the delivery cost from their direct-ordering and in-person traffic. That's what they're doing anyway, just not being explici…

Delivery apps and websites highlight and promote restaurants with "free" delivery. Anecdotally, people like feeling like they are getting a good deal. The "free delivery" that is included in food pricing is more enticing than cheaper food with a $9 delivery.

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

#287

Post by stickfigure »

chrisseaton wrote: post #42
brianlweiner wrote: post #38

Earlier quoted context omitted.

In at least some cases ... the prices you see on grubhub may be higher than the actual prices the restaurant is charging. E.g $17.99 vs $14.99

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…

I'm generally sympathetic to this perspective, but the problem is that the restaurant receives the reputation hit when GrubHub delivers late, cold, overpriced food. Customers don't understand what they're buying, and when something goes wrong, they leave bad reviews on Yelp et al.

This seems like an information problem rather than a pricing problem. As long as the customers understand the relationship between GrubHub and the restaurant, I don't see any problem with GH charging whatever the market will bear. But right now they seem to be deliberately misleading the customer by listing fake prices separate from the delivery fee.

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

#288

Post by excalibur »

IMO the apps should be forbidden from billing restaurants at all. Force them to bill delivery customers directly, keep their hands out of small businesses' pockets, and let the consumer decide how high a fee they're willing to pay for the convenience of ordering via app.

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

#289

Post by cortesoft »

MisterTea wrote: post #143
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…

> 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…

I really hate this sort of argument... that people who use the newer, more convenient, technology are just lazy and should keep using the old way of doing things.

Why stop at delivery apps? Why are lazy people driving cars instead of just riding horses? Why are you ordering things online instead of just going to the store? Why are you farming using that tractor instead of a horse drawn plow?

Small conveniences add up. I don't want to live in a world where we aren't allowed to make things slightly easier.

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

#290

Post by atdrummond »

falcolas wrote: post #201
atdrummond wrote: post #77

Earlier quoted context omitted.

If I worked that full time, I could easily afford my apartment and other expenses. (Castletown, Isle of Man.) Now, if I still lived in London? Different story. Certain restaurant types (high margin, food well suited for delivery) and locales (high population density) seem well suited for delivery. The local steak house? Probably not, for a number of reasons: - The main profit generator at many sit down venues, drinks…

My only real comment here is that you do also have to put anywhere between $5,000 to $15,000 into your car yearly. Between elevated maintenance costs, additional fuel (somewhere around a tank every 2-3 days), and replacing the vehicle when it fails, it eats into the money pretty quickly. At least, that was my experience.

No disagreement. The car would actually eat more of my budget than housing.
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