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It's already 12.5$ with delivery. And even worse, a ton of other fees get added on top of it, making your order total close to 18$. Consumers are already paying

It's already 12.5$ with delivery. And even worse, a ton of other fees get added on top of it, making your order total close to 18$. Consumers are already paying enough, so they don't want to pay more. This is the reason why the Apps turn to restaurants instead. Even with that, they aren't still profitable.

carlmr 6y ago
Then they should cease being in business.
- mardifoufs 6y ago
  Couldn't the same argument be made for restaurants? If they can't afford delivery fees, or can't afford to make money without delivery they shouldn't be in business either.
  - NoSorryCannot 6y ago
    Yes, of course, and they often do go out of business.
  - Spivak 6y ago
    This is true so long as you recognize that this is a change in the market that will make certain restaurants unprofitable. A restaurant that was financially well-off before the advent of 3rd party delivery apps may not be anymore because they have fiercer competition. Restaurants that can absorb the 25-30% hit, for whatever reason, now have an advantage over those that couldn't. The question becomes is this a market failure that needs corrected, or the natural evolution of the food service industry? The case for the former is that you have a vibrant market of pretty high quality restaurants run by their owners as passion projects and have margins that keep the lights on. Squeezing this market because it's now "deliver or die" means that they'll either have to go out of business or reduce their costs which hurts the customer with second order effects -- they will have to reduce their rents by going to a cheaper location that's out of the way, the quality of the food will drop, and/or the staff will be squeezed. I don't necessarily agree with capping the fee but I don't think supply-chain transparency ever hurt the customer.
    - AmericanChopper 6y ago
      If you want to look at the poster child for holding back innovation in order to protect an outdated business model, then look no further than the film and TV industry. You could replace the restaurants in this story with the MPAA and the delivery apps with Netflix, and you’d have a story with exactly the same parameters, just with the heroes and villains of the narrative reversed. If the apps charge too much the restaurants should leave. If that means they end up not delivering what consumers want then they should change their business model or go out of business. If the delivery apps can’t survive under those conditions then they should change their business model, or go out of business. The hospitality industry has always been ultra-competitive and low margin. Bad restaurants go under all the time. The only thing that is different now is that they have somebody else to point the finger at. The other thing I think they all miss is that without these apps, most of the businesses would have had to immediately go under when Covid hit. Those services were the only thing that gave them a shot of keeping the lights on, and for the ones that can’t find a way to make things work, consumers can do without them.
  - djrogers 6y ago
    Could easily be said, however you're overlooking the huge elephant in the room of restaurants being essentially forced into turning into delivery-only or delivery-first businesses due to Covid restrictions. Where I live we've only recently (like within the past few weeks) allowed restaurants to serve food to guests, and only outdoors.
  - ponker 6y ago
    Yes, but the restaurants have been put out of business by government order. This is effectively a Fifth Amendment “taking” and should be compensated.
- princevegeta89 6y ago
  Sadly they don't.. Not as of yet. They got tons of VC money to burn before they have to answer to anyone.

carlmr 6y ago

Then they should cease being in business.

mardifoufs 6y ago
Couldn't the same argument be made for restaurants? If they can't afford delivery fees, or can't afford to make money without delivery they shouldn't be in business either.
- NoSorryCannot 6y ago
  Yes, of course, and they often do go out of business.
- Spivak 6y ago
  This is true so long as you recognize that this is a change in the market that will make certain restaurants unprofitable. A restaurant that was financially well-off before the advent of 3rd party delivery apps may not be anymore because they have fiercer competition. Restaurants that can absorb the 25-30% hit, for whatever reason, now have an advantage over those that couldn't. The question becomes is this a market failure that needs corrected, or the natural evolution of the food service industry? The case for the former is that you have a vibrant market of pretty high quality restaurants run by their owners as passion projects and have margins that keep the lights on. Squeezing this market because it's now "deliver or die" means that they'll either have to go out of business or reduce their costs which hurts the customer with second order effects -- they will have to reduce their rents by going to a cheaper location that's out of the way, the quality of the food will drop, and/or the staff will be squeezed. I don't necessarily agree with capping the fee but I don't think supply-chain transparency ever hurt the customer.
  - AmericanChopper 6y ago
    If you want to look at the poster child for holding back innovation in order to protect an outdated business model, then look no further than the film and TV industry. You could replace the restaurants in this story with the MPAA and the delivery apps with Netflix, and you’d have a story with exactly the same parameters, just with the heroes and villains of the narrative reversed. If the apps charge too much the restaurants should leave. If that means they end up not delivering what consumers want then they should change their business model or go out of business. If the delivery apps can’t survive under those conditions then they should change their business model, or go out of business. The hospitality industry has always been ultra-competitive and low margin. Bad restaurants go under all the time. The only thing that is different now is that they have somebody else to point the finger at. The other thing I think they all miss is that without these apps, most of the businesses would have had to immediately go under when Covid hit. Those services were the only thing that gave them a shot of keeping the lights on, and for the ones that can’t find a way to make things work, consumers can do without them.
- djrogers 6y ago
  Could easily be said, however you're overlooking the huge elephant in the room of restaurants being essentially forced into turning into delivery-only or delivery-first businesses due to Covid restrictions. Where I live we've only recently (like within the past few weeks) allowed restaurants to serve food to guests, and only outdoors.
- ponker 6y ago
  Yes, but the restaurants have been put out of business by government order. This is effectively a Fifth Amendment “taking” and should be compensated.
princevegeta89 6y ago
Sadly they don't.. Not as of yet. They got tons of VC money to burn before they have to answer to anyone.