
Portland approves 10% cap on fees that food delivery apps can charge restaurants - Shivetya
https://www.oregonlive.com/portland/2020/07/portland-approves-10-cap-on-fees-that-food-delivery-apps-can-charge-restaurants.html
======
obibring
This is the right move - local restaurants are hurting and, sadly, the
internet is a place where big corps with large budgets have leverage over
passionate little guys working their butts off.

For those who want to help, I built a chrome extension similar to Honey that
shows a local restaurant's direct ordering website as you're about to order
from that restaurant thru a third party service. If direct ordering isn't
available, it will also show you if that same order is cheaper elsewhere. If
you have a favorite local restaurant that accepts direct orders, please help
us add them to our system by filling in this form:
[https://platerapp.app.link/JACVBOFUY7](https://platerapp.app.link/JACVBOFUY7)

For those interested in checking out the extension, it can be downloaded here:
[https://platerapp.app.link/tDSD3mUTY7](https://platerapp.app.link/tDSD3mUTY7)
(it doesn't collect browsing history or sell personal info or anything of the
sort)

~~~
fpgaminer
(Preface: I'm sure your app filters for stuff like this)

I got kinda burned when I tried to order direct from a restaurant. The last
time we ate there they included a little "order online" card with a link to
their website. So the next time, in the spirit of supporting businesses
directly, I went to their site and ordered. They did use a third-party handler
(ChowNow I think?), but I figured it was a kind of order management third-
party. In fact, after placing the order, I got an additional email from that
third-party handler congratulating me on ordering directly from restaurants,
and that they explicitly don't charge restaurants a fee. Neat, right? Well, Lo
and behold, behind the scenes they just used DoorDash to handle delivery...

That sucked because A) it was more hassle for me to sign up for Yet Another
Account, and B) I have DashPass (free delivery and discounted service charge)
but didn't get to use it, so it ended up costing me more even with the coupon
the restaurant threw in.

Hell, there are even pizza places around me that use DoorDash for delivery.
Pizza places, for goodness sake!

It's a weird world I suppose.

~~~
RussianCow
I have actually seen quite a few restaurants do this, where they use a third-
party ordering system but then delegate to DoorDash/GrubHub for delivery. Is
it maybe because the delivery service gets a smaller cut in this case? I
wonder if the total fees add up to a smaller number with the two middlemen
than with only DoorDash/GrubHub. Presumably, the latter can charge more if
they also handle the transaction as well as bring traffic, as opposed to only
handling delivery.

~~~
adfuioqenasdf
> Is it maybe because the delivery service gets a smaller cut in this case?
> Yes, this is correct. If you order from DoorDash directly, the restaurant
> will pay anywhere from 15-40% of the total transaction.

Restaurants that have partnered with DoorDash for delivery logistics only will
pay usually around $7 per order (this varies depending on geography and
overall partner terms).

However, the key difference is that this delivery fee is almost always passed
on to the customer. So from a restaurant's perspective, they are getting a
great deal: Delivery logistics for customers who want delivery, but if they're
using a low/no commission direct ordering service, they keep (most of) the
full order margin.

~~~
tgel0
> Restaurants that have partnered with DoorDash for delivery logistics only
> will pay usually around $7 per order

Did you mean 7 percent of the order perhaps?

------
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.

~~~
colinmhayes
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?

~~~
austhrow743
5 minute walk then 20 minute wait then 5 minute walk back.

When you're earning $50+ an hour, which many in cities are easily clearing, it
starts to make a lot of sense to pay someone else to do your waiting for you.

~~~
scarface74
I hate this line of reasoning and so do many economists.

It’s not the “opportunity cost” you should be measuring. It’s the “opportunity
cost of the next best alternative.”

If I am an hourly worker making $50 and going to get food would be an hour
that I wouldn’t be working, then yes it is worth $50 to not spend it going to
get food.

But if I am choosing between watching Netflix and going to get food. The next
best alternative pays $0. From a purely financial view it makes sense to get
food.

~~~
nybble41
> It’s not the “opportunity cost” you should be measuring. It’s the
> “opportunity cost of the next best alternative.”

Opportunity cost is _exactly_ that: the next best alternative.

> But if I am choosing between watching Netflix and going to get food. The
> next best alternative pays $0.

If you could be spending that time earning $50, and you choose to watch
Netflix instead—all else being equal—then obviously watching Netflix is worth
more to you than the $50. Going to get food thus implies foregoing at least
$50 worth of leisure time. The fact that no one is paying you to watch Netflix
is irrelevant; monetary compensation is not the sole (or even most signficant)
measure of economic value.

~~~
scarface74
I agree that monetary compensation is not the sole economic value. But still
“how much you could be making that hour” is also irrelevant in most cases.

That’s the entire point.

~~~
cwilkes
No it is highly relevant. I’m “making” happiness by watching a film on Netflix
instead of getting dressed, getting in the car, struggling to find parking,
waiting for the order, and then driving back.

This is an economic decision just One that not easily seen by dollars. I value
a movie more than running errands.

~~~
scarface74
And that still doesn’t have anything to do with the original thesis - “if I
make $50/hour when I am working. That means I should value my time at
$50/hour”. The opportunity cost is not $50/hour if you wouldn’t have been
using that hour to work.

~~~
nybble41
> The opportunity cost is not $50/hour if you wouldn’t have been using that
> hour to work.

It is _at least_ $50 per hour if you _could_ have been using that time to
work. Anything else that you choose to do instead of working is prima facie
worth _more_ to you than the $50 you could have been earning. The opportunity
cost—the next best alternative—is either working and earning $50 or else
something you value even more than $50.

You are attempting to claim the opposite: that if someone can make $50 per
hour working, but chooses to do something else, then that time is somehow
worth _less_ than $50 per hour. This makes no sense at all. This would presume
that the person knowingly and deliberately chooses the option which is less
valuable from their own point of view.

~~~
scarface74
If I am a salaried employee, no matter how much time I work, over 40 hours a
week, it would not earn me more money.

The only reason that I would work around 40 hours a week instead of slacking
off is because ethically, that’s what I agreed to do.

Most people aren’t in a position where they could put in every waking hour
into pursuits that generate money.

What percentage of people that post on HN are working hourly billable jobs?

~~~
nybble41
Overtime pay exists, even for many salaried positions. Short of that, if you
routinely put in extra productive hours you should expect a higher salary. And
you could always take on a second job, switch jobs, or do some work around the
home yourself instead of paying someone else to do it for you. There is no
shortage of opportunities to trade some leisure time for extra cash.

~~~
scarface74
For tech workers who dominate HN and are the first to say that their free time
is worth whatever their total comp is, how many get overtime pay?

How many people who put in extra time actually get recognized by their company
for doing so at their equivalent hourly rate?

------
inkaudio
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.

example: Doordash and Pizza Arbitrage
[https://news.ycombinator.com/item?id=23216852](https://news.ycombinator.com/item?id=23216852)

The End game is to be the dominant food ordering platform in any given town
where you get to dictate rates like 25%.

Since predatory pricing is illegal, this response is justified. However, it
would be better if regulators enforce predatory pricing rules to begin with,
which they rarely ever do.

for more info on predatory pricing rules in America see:
[https://www.ftc.gov/tips-advice/competition-
guidance/guide-a...](https://www.ftc.gov/tips-advice/competition-
guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost)

~~~
MisterTea
> 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/cycle/drive to get their meal.

*save for the rare late night drunk+high AF Dominoes orders.

~~~
a_c_s
Many of these platforms charge a fee for phone calls to the restaurant too.

Platforms like Seamless go so far as to set up websites for restaurants (that
often have better SEO than the restaurant's original website), so the phone
number listed routes through Seamless, helping to ensure they get their cut of
any order.

~~~
dumbfoundded
If a restaurant doesn't comply, wouldn't this be fraudulent representation?

~~~
gruez
AFAIK last time it came up people mentioned that they were allowed to do that
because of a clause in their EULA

[https://news.ycombinator.com/item?id=20321705](https://news.ycombinator.com/item?id=20321705)

------
andy_ppp
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?

~~~
albntomat0
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](https://news.ycombinator.com/item?id=23216852)

~~~
tonyarkles
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.

~~~
vorpalhex
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.

~~~
tonyarkles
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.

------
crazygringo
There are legitimate abuses of market power. But this is not one of them.

Nobody's forcing restaurants to enter these partnerships, there's competition,
and delivery people still need to be paid.

There are two obvious outcomes here: either food delivery apps will restrict
delivery to profitable orders only (stop working for some restaurants, require
higher order minimums, etc.), or they'll stay to avoid bad press but then this
is essentially the city blackmailing investors to subsidize food delivery.

It's one thing for COVID-19 to restrict business services, and deeply
unfortunate that businesses wind up closing. It's another thing entirely to
force businesses to continue operating but at a loss.

If Portland or other cities believe it's a necessary public service to provide
subsidized food delivery, then they ought to pay for it themselves through tax
dollars. Either hire city-employed deliverypeople and make them available to
restaurants, or pay GrubHub etc. to do it through a normal business contract.

But capping food delivery rates to far below what they were pre-pandemic is
not a fair approach.

~~~
grumple
> There are legitimate abuses of market power. But this is not one of them.

I’m curious. How long does a company need to lose money on each unit of work
they do, funded by endless foreign vc money, before it’s clearly an abuse of
their financial power and destructive for the market?

No company can compete fairly against people willing to lose billions just for
market share.

~~~
crazygringo
Except money is never endless. And consumers are benefiting in the process
from cheap prices.

So as long as consumers are benefiting, and the situation can't go on forever,
where's the abuse?

Abuse is generally a characteristic of natural monopolies, etc. Not merely a
competitor with deep pockets. That's just healthy competition for the good of
consumers.

------
cocoa19
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.

~~~
cocoa19
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.

~~~
mindslight
This ordinance does nothing to regulate consumer prices themselves. Food
delivery _is_ a basic need for restaurants during this time. Increased price
transparency, which is really the only effect of this ordinance, makes markets
function better.

------
scarface74
On its face, this is really a bad idea. Price caps never lead to good market
outcomes in a competitive market. You end up with an imbalance where the
people who are willing to pay more aren’t getting served and demand isn’t
getting met and you are reducing the supply where the suppliers could have
made more money. This isn’t good for either side.

However, if this means that the supplier can’t charge the restaurants but
_can_ charge a higher delivery fee and it’s explicit. That seems like a win. A
free market operates more efficiently when all parties have enough
information.

------
swalsh
This feels like capping extortion. The real problem in my opinion is the
delivery apps masquerading under a restaurants name online, and then then
charging for it. When I order online, I have no idea if i'm ordering from the
restaurant directly, or if i'm ordering from some app that's registered a
website under their name, and has better SEO.

------
albntomat0
Seems like a solid move, given the capture of the market by the food delivery
apps, and their shady business practices (like the thread from a while ago
where a delivery service was making fake websites for restaurants, without
their knowledge or consent).

Why have this expire post COVID though?

~~~
spacephysics
On paper it looks good, and given the players in the arena, there’s not much
competition, especially since there’s a high bar of entry for new competition.

Perhaps the idea behind not imposing such regulations is a free market
argument, in which the most efficient price won’t be selected for, thereby not
producing the optimal supply/demand.

I would argue against this point that we would be assuming perfect
competition, and given the anti competitive behavior of gig economy companies
in this space (such as buying restaurant domain names, making fake websites
with phone numbers they own to trick people into thinking they’re ordering
directly) and lack of competition, this seems appropriate for now.

Though the policy timeline should be extended, I don’t believe it should be
indefinite. When the aforementioned issues are resolved, I’d agree with the
free market side.

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.
We have inefficiencies In the infrastructure, less population density, and
lack of competition that prevents us being in a similar boat.

~~~
londons_explore
> 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.

~~~
borkt
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

~~~
mantap
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.

------
cameldrv
IMO this is misguided. The reason that restaurants are struggling is because
they're unable to provide the value they once did, but they're still bearing a
lot of the costs that used to provide it.

All of these restaurants are paying rent on their dining rooms, when they're
only using the kitchens. The customer experience, paid for by waiter wages and
dining room rent, is now being provided by the delivery companies. The whole
customer interaction, from taking the order, to processing the payment to
bringing the food to the customer has been taken over by the delivery
companies, and that's a huge part of the cost and the value of the meal.

Restaurants can't reasonably expect the delivery companies to just eat all of
their substantial costs because the Restaurant has a stranded asset that used
to provide that service. Really, it should be the landlords that are taking
the hit because all of that prime dining space now has the same value as some
tiny cloud kitchen off a back alley.

~~~
GordonS
I disagree - large cuts to delivery services were hurting restaurants long
before COVID, and the predatory practices of the likes of Grubhub and DoorDash
have been well documented here on HN in the past.

~~~
cameldrv
I don't doubt that restaurants are paying big fees to the delivery companies,
but the delivery companies are still losing money on every order. The
predatory pricing is that they're charging too little, not too much. That's
how you get this pizza arbitrage stuff. Now some of the other practices of the
delivery companies like setting up fake web pages for restaurants are really
objectionable, but I think that what's happening now is a separate problem.

Ultimately though, the problem of the pandemic is that restaurants need
customers to pay for both the dining room and the delivery, and that's just
too much money. If you're running a cloud kitchen, you don't expect to be able
to get the same amount of money for a meal as a sit down restaurant, but the
sit down restaurant is now providing the same product as the cloud kitchen.

------
falcolas
Are any of these food delivery app services actually making profit right now,
or are they just burning VC capital? A news podcast I listened to yesterday
made the statement that every food delivery company is doing deliveries at a
loss. This seems problematic for making delivery a viable business without
forming a monopoly to get the scale required to make things profitable.

~~~
darrenoc
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.

~~~
iso1631
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?

~~~
falcolas
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.

~~~
atdrummond
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.

~~~
falcolas
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.

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

------
mchusma
If we were going to limit profits, we should target visa/MasterCard/amex
instead.

They are a true oligopoly taxing the entire economy and have acted in a highly
anti-trust fashion. Limiting their fees to something like 0.1% of the
transaction is plenty to not lose money and would put back something like 2.8%
of every transaction back into lower prices or into the businesses hands.

~~~
gruez
The actual benefits to consumers/businesses is going to be much less than
2.8%. For one, actual interchange fees today is nowhere near 2.9% like you
suggest. It's not a flat rate, and varies wildly depending on the credit card
type and merchant category[1]. For instance, a supermarket might get charged
around 1.5% if the customer is using a basic credit card, or 2.1% if the
customer is using a top end rewards credit card. I suspect that the weighted
average of interchange rate across all consumer spending is probably under 2%.
Of that 2%, a big part of it is probably also being passed to consumers via
cash back/rewards programs. In Europe where interchange fees are capped, their
cash back/rewards program are significantly worse than the ones in US.
Combining all these factors, I'd say that the total savings to businesses and
customers combined is probably under 1%.

[1] [https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-
in...](https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-
reimbursement-fees.pdf)

------
discopicante
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 understanding
of restaurant economics before it collapses under the current pressure – many
will not return for a long time, if ever.

~~~
bawolff
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 of business.

At most i support a law requring that resturants can set different prices for
uber eats than for walk in customers

~~~
castlecrasher2
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.

~~~
delfinom
Scalping product AND funneling all the blame on their fuckups onto the
restaurants. It's a american rent seekers dream gig.

------
airstrike
Why does it have to be a percentage? Taking the food from point A to point B
costs the same whether it's sardines or caviar. I never understood this...

Seems like charging for the distance traveled and even the time of day would
make a lot more sense

~~~
zild3d
> Taking the food from point A to point B costs the same whether it's sardines
> or caviar

orders for 1-2 people yes, but that doesn't handle large orders for parties,
etc

~~~
airstrike
Sure, then make it

    
    
      f(number_of_items, distance_traveled, time_of_day)

------
avita1
The cynic in me

> noted that the city rule has a provision that drivers’ pay can’t be reduced
> because of the fee caps

This seems impossible to enforce right? The city can't reasonably have any
insight into why driver fees change.

------
mD5pPxMcS6fVWKE
If delivery costs the same as an average Uber ride, say, $10, it makes every
order under $100 unprofitable. An average food order is way below that, I
think. So the math doesn't add up.

~~~
reaperducer
_If delivery costs the same as an average Uber ride, say, $10, it makes every
order under $100 unprofitable._

What you pay as an Uber passenger is not even remotely close to what Uber pays
its drivers. So a $10 cost for a food delivery may not be realistic.

How much an Uber trip costs Uber depends on a lot of factors, but I can tell
you from experience that very often if a passenger paid $10 for a trip, the
driver saw far less than $5 of it. That's why they're always angling for tips.

When I drove for Uber, a very common run was from the airport to a specific
large convention hotel. The trip was maybe five miles. The passengers often
complained about having to pay $25-$40 or more for the short trip. As a
driver, I got maybe $3.50 out of it.

~~~
mD5pPxMcS6fVWKE
What's the big difference for a driver? It's still the same time, same gas and
miles put on the car. True, the food won't throw up in his car, but he should
get out of the car to pick up the order, often has to wait at the counter.

------
cpascal
I live in Jersey City and in March the mayor instituted an executive order
capping delivery commissions to 10%. The effect of this was every Uber Eats
order had a $3 "Executive Order Surcharge" for deliveries in Jersey City. They
just removed the surcharge after the NJ legislation/governor passed a law
making the cap state-wide.

------
kabacha
When I found out that local delivery service here is charging around 30% fee
my mind was blown. I asked my friend who owns a small restaurant how he puts
up with it and he basically said he has no choice, especially during covid.
This made me think I should go out more and support the local businesses more
as my country opened up already. Well my favorite mexican place was actually
charging 30% more for me to eat in person there so it was actually cheaper to
sit at home and have food delivered, I was almost tempted to sit down there
and order via the app.

The whole restaurant industry is so messed up with coupons and all sorts of
marketing tricks and manipulations that I just wish there was static price
with single delivery fee so I could enjoy my meal and get over it without
having to be constantly vigilant to not feel ripped off. I hope more places
follow Portland.

------
charlesdaniels
I wonder if there would be a market for something that presented the user with
a food-deliver-app type interface, but in actual fact is just interfacing with
an API on the restaurant's behalf (in lieu of the restaurant having a custom
delivery order page).

Basically a middle man to replace restaurant's own custom ordering systems
(which are often janky, and all act differently). The delivery would still be
done by the restaurant's employees, but the service would handle billing the
customer, building the UI, and so on.

Such a service could charge a far lower fee to the restaurants, since they
would not need to employ, ensure, etc. drivers. I doubt the customer would
care either way, as long as the UI is just as convenient as the existing food
delivery services.

~~~
Traster
The problem is that you're basically creating a brand arbitrage opportunity.
Big corporates are going to do their own things, premium brands are going to
get courted by Uber Eats & Door Dash with special deals and cuts, so you end
up with small independents who don't draw in big business - there's all sorts
of screw ups both good faith and bad that are going to impact _your_ brand,
not theirs.

------
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.

------
lifeisstillgood
IMO regulation should be there to protect the smaller 'people' (small family
businesses, or actual people) from abuse by larger entities, or to encourage
socially beneficial change (which usually tends to benefit the smaller players
anyway).

So this seems a win on my part.

------
ertemplin
Some restaurants just raise their prices to compensate for delivery fees.

One extreme example is a burger restaurant in SW Seattle that charges $6.80
for a burger if you buy it in the restaurant and $12.00 if you order it on a
delivery app.

------
nerfhammer
They should charge a fee based on how efficiently the restaurant gets the food
to the delivery driver, because having the driver spend 20 minutes parking and
waiting in line is probably why delivery is so expensive but that delivery
person's wasted time doesn't otherwise cost the restaurant much.

With a normal uber ride you have to walk out to the curb to meet the driver,
who does not have to find somewhere to park. If they brought the orders out to
the curb like when an uber arrives rather than having drivers park & wait
maybe that would make delivery far less expensive.

------
biophysboy
One thing I've always wondered about these delivery/rideshare "experiences":
why didn't they just sell the software on a subscription service? Like a
shopify or slack or something. Why did they also have to replace the drivers?
Aside from being suspicious labor wise, it seems like a bloated way for
software engineers to start a business, especially because they don't know how
labor works for taxi fleets/ restaurants across the globe. Why not just make
the businesses your customers instead of the end users?

------
pcvarmint
Expect longer wait times for food delivery in Portland.

Price caps, fee caps, rent caps, and "price gouging" bans produce shortages.
[0]

This is an economic fact as strong as the law of gravity.

[0] [https://fee.org/shows/audio/words-numbers/the-law-of-
demandi...](https://fee.org/shows/audio/words-numbers/the-law-of-demanding-
more-supplies)

------
aahhahahaaa
It's outrageous how these companies have taken charge over individual
businesses.

Some restaurants don't even know that they're listed on these delivery
services and get their search results more or less hijacked by internet savvy
delivery startups with infinite money.

In other cases they feel as though they have no choice due to the popularity
of the online ordering services, and they get into contracts they don't really
understand and have their already razor-thin margins eaten into.

------
onetimemanytime
>> _Portland approves 10% cap on fees that food delivery apps can charge
restaurants_

Now all they have to do is force delivery apps to deliver at that price point.
But since they can't do that, they'll simply skip Portland. Maybe 30% is too
much, but 10% is way to little. The company, drivers etc have to share that $5
off a $50 order and a lot of that is cost (car, gas, insurance)

------
manigandham
If the restaurants don’t want the app then why don’t they decline? Why is the
government involved in setting rates? This never ends well.

------
TheMagicHorsey
How many times and places do price controls need to be tried before these
idiot government functionaries realize that for any such policy there are
winners and losers. Here the losers are those who cannot be profitably served
under a fixed cost limit, and so who will not be given the option to pay for
delivery as a result.

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

~~~
giarc
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
of move.

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

------
sub7
I can't believe all the crypto hype has led us to bogus "defi" ponzis instead
of a widely adopted protocol for transport and delivery that cuts out these
middlemen idiots.

Oh and ticketing too, venues and artists pay an absurd amount to Ticketmaster
etc. Needs to stop.

------
resters
In my view the sales tax is at least as big a problem as the delivery fees.
Delivery fees cover things like healthcare for gig workers, etc. Sales tax
pays for the police who kill people.

------
mtnGoat
Isn't the SV way to just thumb your nose at local authorities? AirBNB and Uber
seem to have done well doing it... I wonder how well Portland will do with
enforcing this.

------
hackeraccount
Why are they only setting the price on food delivery?

------
Jommi
Let's see if they roll this into their prices

------
mas3god
Sad to hear, people really need to learn the concept of "voting with your
dollar"

------
WhompingWindows
So if you're a Portland resident and you see a fee above 10%, what do you do?

------
londons_explore
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.

~~~
bryanlarsen
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.

~~~
londons_explore
Some services, like Airbnb for example, specifically say a house owner is not
allowed to put a different price on Airbnb Vs some other site. That means the
house owner must charge bookings not via Airbnb a higher price than normal to
recoup the fees paid on Airbnb bookings.

That should, in my opinion, be outlawed.

------
tathougies
Oh geez.... welp. Guess I can say goodbye to delivery..

------
thedogeye
Price controls on food. What could go wrong?!

------
matthewfelgate
How about let the free market decide?

------
danlugo92
Does this need to be a law really?

------
jes5199
still seems high to me

------
gjs278
considering the food delivery apps don’t make money, I don’t see how this will
help anything

------
valuearb
They should have just banned food delivery services.

Oh wait, they just did.

------
centimeter
Surely _this_ price control won’t cause any unintuitive deadweight loss...

------
frankydp
There was a word in the past for current SF technology companies that are
taxing others for passage through their "lands".

Robber Baron

I suggest we update the Wikipedia to add "technologist" behind "industrialist"
on the title.

~~~
fennecfoxen
Please do not update Wikipedia in the manner you have described. The update
you describe would change the Wikipedia pages in question to be ideological in
nature, but Wikipedia's preferred ideology is to attempt neutrality. Such an
edit would be seen mostly by Wikipedia editors, who may be somewhat
sympathetic, but would nevertheless revert your changes.

Wikipedia is not an effective venue to litigate whether technology companies
are good or bad. Thank you for not wasting Wikipedia editors' time.

------
chvid
In a country where tipping of 20% is the norm ... there is all of sudden a cap
of 10% on what the delivery guy can make?

~~~
yangminded
It caps the fee that the delivery service can take.

You can still tip the delivery person as much as you like.

~~~
ceejayoz
It's not even that. They can still put a $500 delivery fee on the bill, if
they want. They just can't hide it in the food costs anymore, and take it out
of the restaurant's cut.

------
diebeforei485
The problem with showing a $10 delivery fee on top is that it drops conversion
rates by a lot.

But by increasing the prices of each menu item by 20% (to cover the app's cut)
and having a palatable $3.99 delivery fee (so the total cost to the customer
is the same), you can increase sales.

Amazon and other online retailers figured this out a long time ago. Moving
some of the shipping fees into the price of the product can boost sales.

------
quotemstr
Price controls create shortages. They always have and always will. You can't
just create by fiat the economic outcomes that you'd prefer. You have to
create the conditions under which those outcomes become natural. If you want
to limit monopoly pricing of food delivery services, limit monopolistic
behavior by breaking up large players. Don't allow one company to dominate an
industry and then arbitrarily cap its revenue to some number that feels good.

