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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

#71

Post by maltelandwehr »

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 outskirts.

I fully support the idea behind this rule. But this implementation has been proven to not work.

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

#72

Post by Proven »

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?

The socialist busybodies in Portland want to "do something", so apart from rendering these businesses unprofitable, they are also going to put more of the relatively less skilled workers out of work, while at the same time lower the quality of life for consumers who will now be forced to find less convenient or more expensive ways to eat.

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

#73

Post by bootlooped »

iso1631 wrote: post #19
darrenoc wrote: post #12

Earlier quoted context omitted.

Nope, they don't make any profit even when charging 30% fees. So this 10% cap will probably cause them to withdraw from the market.

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.

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

#74

Post by ceejayoz »

andrewnicolalde wrote: post #43
albntomat0 wrote: post #31

Earlier quoted context omitted.

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

Honest question, how is that anticompetitive?

The Grubhubs of the world have substantially better SEO juice; if they start offering delivery for your restaurant, their listing is probably going to wind up above yours.

Once a substantial portion of a restaurant's orders come in this way, they can cut off the flow at will. "Sign a contract with us, or these folks will go elsewhere".

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

#75

Post by bryanlarsen »

londons_explore wrote: post #21

I'd like to see this rule applied only if the delivery provider insists that the menu prices be the same with or without delivery. Personally I think a provider of any 'value add' service being able to dictate the price without their service is insane.

Is this not the case? It looks like it's a cap of 10% on what the app can charge the restaurant. It doesn't say one way or another, but I don't see any restriction on what the app can charge the consumer. The big problem isn't so much the size of these fees, the big problem is that these fees are hidden. Like you, I'd rather see a 0% cap, requiring the app to charge the customer directly.

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

#77

Post by atdrummond »

falcolas wrote: post #46
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?

Honestly, those delivery companies are probably underpaying their employees for delivery. I've worked at a pizza delivery company, and including tips, I earned about $140 a day (inflation adjusted, post-taxes) for delivering pizza all over town. It was certainly not enough to provide for a long-term living, given the vehicle upkeep costs and gas.

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, are unlikely to be ordered.

- Impulse add-ons, especially dessert, are less likely. Even with dark pattern upsells on apps. Dining out has many minutes or hours during which additional ordering opportunities are available. Ordering out is a single discrete event.

- On platforms that don’t work with the restaurant, the option of a higher margin delivery-only menu doesn’t exist. Items with low or negative margin can go out the door that otherwise wouldn’t.

- Delivery services seemingly take more for merchant processing than many restaurant chains I’ve helped secure acquiring for. Likely due to much higher chargeback/fraud on digital apps than through traditional delivery or in-restaurant. This is a killer on a low margin vertical such as dining.

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

#78

Post by castlecrasher2 »

bawolff wrote: post #68
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 dont really see why its my responsibility as a consumer to police if business deals resturants engage in are "fair". That is the resturant's job. Its part of running a business. Actually its the main part. If the deal doesn't make financial sense - then the business shouldn't make the deal. If the business cannot survive neither taking the deal nor not taking it, then the business is not viable and it should go out…

How would restaurants have a choice, here? As far as they know, Uber Eats/Doordash/etc are just "regular customers" but are really just scalping the restaurant's product.

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

#79

Post by zwily »

tonyarkles wrote: post #55
albntomat0 wrote: post #31

Earlier quoted context omitted.

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

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.

Legally, do you have a business relationship with a company you buy a product from on Amazon?

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

#80

Post by mantap »

borkt wrote: post #26
londons_explore wrote: post #15

Earlier quoted context omitted.

> In China, if I recall correctly, they have a food economy such that it’s cheaper to order take out, and have the food delivered, than actually cooking. Is this true? Here in London, a typical delivered meal would cost ~$20, whereas a weekly shop and cooking probably takes 5 hours/week, but costs only ~$2 per meal.

I believe so in some areas, but only because they are using kitchens/ingredients that cost less than restaurants or stores, IE located in bad areas, conditions/treatment worse for cooks, payment less for cooks, etc. Not something that should be supported but something that technology unfortunately makes possible and convenient

This is just reflective of inequality. I don't know about China specifically but in other asian countries that I know, most locals buy their ingredients at the market, and grocery stores target richer less price-conscious consumers. So it's certainly possible that the markup that the grocery store applies is greater than the cost of cooking and delivering the food, but that doesn't mean that it's cheaper than buying the ingredients at a market and cooking it yourself.
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