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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

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.

_sbrk 6y ago
Indeed. Let the market discover the proper price for this service.
- _wldu 6y ago
  The market can't discover this when consumers are misled by the delivery services. 10% is reasonable. Let the delivery service add a fee to recover their cost rather than take the food provider's profit. Otherwise, these food providers are going to go out of business (and be bought by the delivery services).
  - _sbrk 6y ago
    The market determines what is reasonable, not you (or any one person). "Recover their cost"? What is this, communist Russia? So what if the food providers sell off to the delivery services? Perhaps it will result in a better match for the market demands. Preserving jobs isn't the goal of capitalism, profit is. Those businesses who try to go too far toward extreme profit usually fail when smaller, more nimble upstarts dig the foundations out from under the bigger ones.
ceejayoz 6y ago
> 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. Isn't this what this does? It's a cap on the hidden cut these apps take from what the bill shows as the restaurant's revenue. Instead of taking 30% of my $10 pizza, Uber/Grubhub/etc. now have to decide to put that $3 in the fee they show to the user if they want that revenue.
- EForEndeavour 6y ago
  I think the parent commenter would prefer a law that requires ordering platforms to list their cut separately, but doesn't actually cap how big that cut can be. That would give customers more information to choose for themselves whether to use a given ordering platform.
  - ceejayoz 6y ago
    This largely does that, by my reading. The delivery apps aren't forbidden from charging the customer a sky-high fee. They're just not permitted to hide it in the supposed cost of food. Before: Pizza ($10), Grubhub fee ($2), delivery fee ($3), but the Grubhub fee is actually $5 because they're taking 30% of the restaurant's revenue behind the scenes. Now Grubhub has to accurately show their fee as $5 if they want that revenue still. The restaurant either makes more money to stay afloat, or can charge less for the pizzas if they're doing fine.
    - EForEndeavour 6y ago
      Sorry, which article are you reading? I'm not seeing anything about forcing third-party delivery platforms to list out their fees separately in the linked article, or in the Portland ordinance itself: https://www.portlandoregon.gov/auditor/article/763323 https://www.portlandoregon.gov/auditor/article/763323 The law sets a cap on fees (including delivery fees!) of 10% of the menu price, and prohibits delivery companies from withholding wages or tips from delivery staff.
      - ceejayoz 6y ago
        Read the order closely. > “Purchase Price” means the menu price of an online or phone order. Such term excludes taxes, gratuities, and any other fees that may make up the total cost to the customer of an online order. > It shall be unlawful for a Third-Party, App-Based Food Delivery Platform to charge a Restaurant a fee (including, without limitation, any delivery fee) for the use of its services that totals more than 10% of the Purchase Price of the order made through the Third-Party, App-Based Food Delivery Platform Nowhere does it say they can't charge customers a huge app/delivery fee.
cocoa19 6y ago
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.
- EForEndeavour 6y ago
  Well, except for times like the past few months in which delivery and takeout (which is also done through third-party platforms) proved to be an essential service across the world.
- neotriple 6y ago
  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.
- mindslight 6y ago
  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.
delfinom 6y ago
Hah, that's hardly the beginning of their shady practices.
mehlmao 6y ago
What market competition? Uber is buying Postmates. Both businesses lose money. The only reason to do so is to decrease competition.
deleted 6y ago
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SwiftyBug 6y ago
Most people couldn't care less how much the restaurant or the the driver is making from an order. Believing the market will regulate itself to a point where the restaurant and the driver receive a fair cut while the customer pays less and the gig app makes a profit is almost childish. The scales are not balanced in this equation. A company that has virtually infinite money to burn is in a position to burn the whole market to the ground and rebuild it on it's own terms if it wished. And in fact that's what has been happening.
deleted 6y ago
[deleted]
cwhiz 6y ago
This is a cap on the invisible fee that Uber and other companies charge to restaurants. It is not transparent or visible on the consumer end that a restaurant is only getting 75% of the listed food prices. This is, in effect, forcing these delivery companies to be more transparent about their pricing. Instead of charging a restaurant an invisible 25% it will be capped at 10% and the delivery companies will have to move the remaining 15% onto the consumer. Or I guess they can eat the 15% but they can't make money as it is, so I doubt that. I would be fine if it was instead just a total price transparency law. I think consumers should know exactly where their bill is going. However, these delivery companies are extraordinarily shady and I believe they would leave no stone unturned to obfuscate the fact that they are secretly ripping off restaurants. I think capping the invisible restaurant fee at 10% is the simplest approach to reach the same desired end result.
- citizenkeen 6y ago
  Exactly. This is not a cap on prices, it's a cap on hidden prices. When the restaurants have to raise their prices to compensate for Uber's fee, Uber doesn't take the hit, the restaurant does. This forces Uber to more clearly tell the customer how much their convenience costs, but it can be anything Uber wants.
  - karlakush 6y ago
    No, it doesn't. Previously, when delivery services got an order for a $10 burger, they charged a $2 fee to the restaurant and a $4 delivery fee to the customer for a total charge to the customer of $14 and $6 of revenue for the delivery service. Now, they're capped at charging the restaurant a $1 fee so they will need to charge a $5 fee to the customer ($15 total) to get the same $6 of revenue. This is really just an attempt to shift wealth from consumers to restaurants. Now consumers will have to pay one dollar more which goes mostly to the restaurant.
door99 6y ago
> 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.
manuelabeledo 6y ago
> Why should we force a cap rather than let market competition improve prices? This is an extremely simplistic perspective on the matter. Competitors have proved that they are willing to lose money on the short term, because the goal is to dominate the market in the long term. This has a name, and it's "dumping". On top of that, these services are saturating and cannibalizing the food delivery market share, not by driving restaurants out of business, but their delivery services. At some point in time, the perception of such services would be that they are the only available options, giving restaurants no chance to compete, even when they are the actual providers or manufacturers of the goods.
mkolodny 6y ago
When I take a flight, I don't demand to know how much the airline is paying the pilots and flight attendants. When I buy food from a restaurant, I don't demand to know how much the restaurant is paying the waiters and cashiers. I also don't know how much the restaurant paid for the food they cooked. That's true of any company/workers/suppliers. People only know and care about how much they end up paying. As long as there's a minimum wage, people don't know, and usually don't care how much a company pays their workers/suppliers.
- cocoa19 6y ago
  I don't think that's a good analogy because having a pilot or not is not optional. A better analogy would be extra baggage. I appreciate being able to save $25-$50 in domestic flights by not bringing an extra bag.
  - mkolodny 6y ago
    Unlike asking people to pay for baggage, this law doesn't change how much the customer ends up paying.

_sbrk 6y ago

Indeed. Let the market discover the proper price for this service.

_wldu 6y ago
The market can't discover this when consumers are misled by the delivery services. 10% is reasonable. Let the delivery service add a fee to recover their cost rather than take the food provider's profit. Otherwise, these food providers are going to go out of business (and be bought by the delivery services).
- _sbrk 6y ago
  The market determines what is reasonable, not you (or any one person). "Recover their cost"? What is this, communist Russia? So what if the food providers sell off to the delivery services? Perhaps it will result in a better match for the market demands. Preserving jobs isn't the goal of capitalism, profit is. Those businesses who try to go too far toward extreme profit usually fail when smaller, more nimble upstarts dig the foundations out from under the bigger ones.

ceejayoz 6y ago

> 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. Isn't this what this does? It's a cap on the hidden cut these apps take from what the bill shows as the restaurant's revenue. Instead of taking 30% of my $10 pizza, Uber/Grubhub/etc. now have to decide to put that $3 in the fee they show to the user if they want that revenue.

EForEndeavour 6y ago
I think the parent commenter would prefer a law that requires ordering platforms to list their cut separately, but doesn't actually cap how big that cut can be. That would give customers more information to choose for themselves whether to use a given ordering platform.
- ceejayoz 6y ago
  This largely does that, by my reading. The delivery apps aren't forbidden from charging the customer a sky-high fee. They're just not permitted to hide it in the supposed cost of food. Before: Pizza ($10), Grubhub fee ($2), delivery fee ($3), but the Grubhub fee is actually $5 because they're taking 30% of the restaurant's revenue behind the scenes. Now Grubhub has to accurately show their fee as $5 if they want that revenue still. The restaurant either makes more money to stay afloat, or can charge less for the pizzas if they're doing fine.
  - EForEndeavour 6y ago
    Sorry, which article are you reading? I'm not seeing anything about forcing third-party delivery platforms to list out their fees separately in the linked article, or in the Portland ordinance itself: https://www.portlandoregon.gov/auditor/article/763323 https://www.portlandoregon.gov/auditor/article/763323 The law sets a cap on fees (including delivery fees!) of 10% of the menu price, and prohibits delivery companies from withholding wages or tips from delivery staff.
    - ceejayoz 6y ago
      Read the order closely. > “Purchase Price” means the menu price of an online or phone order. Such term excludes taxes, gratuities, and any other fees that may make up the total cost to the customer of an online order. > It shall be unlawful for a Third-Party, App-Based Food Delivery Platform to charge a Restaurant a fee (including, without limitation, any delivery fee) for the use of its services that totals more than 10% of the Purchase Price of the order made through the Third-Party, App-Based Food Delivery Platform Nowhere does it say they can't charge customers a huge app/delivery fee.

cocoa19 6y ago

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.

EForEndeavour 6y ago
Well, except for times like the past few months in which delivery and takeout (which is also done through third-party platforms) proved to be an essential service across the world.
neotriple 6y ago
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.
mindslight 6y ago
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.

delfinom 6y ago

Hah, that's hardly the beginning of their shady practices.

mehlmao 6y ago

What market competition? Uber is buying Postmates. Both businesses lose money. The only reason to do so is to decrease competition.

deleted 6y ago

[deleted]

SwiftyBug 6y ago

Most people couldn't care less how much the restaurant or the the driver is making from an order. Believing the market will regulate itself to a point where the restaurant and the driver receive a fair cut while the customer pays less and the gig app makes a profit is almost childish. The scales are not balanced in this equation. A company that has virtually infinite money to burn is in a position to burn the whole market to the ground and rebuild it on it's own terms if it wished. And in fact that's what has been happening.

deleted 6y ago

[deleted]

cwhiz 6y ago

This is a cap on the invisible fee that Uber and other companies charge to restaurants. It is not transparent or visible on the consumer end that a restaurant is only getting 75% of the listed food prices. This is, in effect, forcing these delivery companies to be more transparent about their pricing. Instead of charging a restaurant an invisible 25% it will be capped at 10% and the delivery companies will have to move the remaining 15% onto the consumer. Or I guess they can eat the 15% but they can't make money as it is, so I doubt that. I would be fine if it was instead just a total price transparency law. I think consumers should know exactly where their bill is going. However, these delivery companies are extraordinarily shady and I believe they would leave no stone unturned to obfuscate the fact that they are secretly ripping off restaurants. I think capping the invisible restaurant fee at 10% is the simplest approach to reach the same desired end result.

citizenkeen 6y ago
Exactly. This is not a cap on prices, it's a cap on hidden prices. When the restaurants have to raise their prices to compensate for Uber's fee, Uber doesn't take the hit, the restaurant does. This forces Uber to more clearly tell the customer how much their convenience costs, but it can be anything Uber wants.
- karlakush 6y ago
  No, it doesn't. Previously, when delivery services got an order for a $10 burger, they charged a $2 fee to the restaurant and a $4 delivery fee to the customer for a total charge to the customer of $14 and $6 of revenue for the delivery service. Now, they're capped at charging the restaurant a $1 fee so they will need to charge a $5 fee to the customer ($15 total) to get the same $6 of revenue. This is really just an attempt to shift wealth from consumers to restaurants. Now consumers will have to pay one dollar more which goes mostly to the restaurant.

door99 6y ago

> 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.

manuelabeledo 6y ago

> Why should we force a cap rather than let market competition improve prices? This is an extremely simplistic perspective on the matter. Competitors have proved that they are willing to lose money on the short term, because the goal is to dominate the market in the long term. This has a name, and it's "dumping". On top of that, these services are saturating and cannibalizing the food delivery market share, not by driving restaurants out of business, but their delivery services. At some point in time, the perception of such services would be that they are the only available options, giving restaurants no chance to compete, even when they are the actual providers or manufacturers of the goods.

mkolodny 6y ago

When I take a flight, I don't demand to know how much the airline is paying the pilots and flight attendants. When I buy food from a restaurant, I don't demand to know how much the restaurant is paying the waiters and cashiers. I also don't know how much the restaurant paid for the food they cooked. That's true of any company/workers/suppliers. People only know and care about how much they end up paying. As long as there's a minimum wage, people don't know, and usually don't care how much a company pays their workers/suppliers.

cocoa19 6y ago
I don't think that's a good analogy because having a pilot or not is not optional. A better analogy would be extra baggage. I appreciate being able to save $25-$50 in domestic flights by not bringing an extra bag.
- mkolodny 6y ago
  Unlike asking people to pay for baggage, this law doesn't change how much the customer ends up paying.