5 ms·

> This distinction actually makes some sense because the former is explicit and the latter is hidden. Hidden to whom? The customer? Why does that matter? If I

> This distinction actually makes some sense because the former is explicit and the latter is hidden. Hidden to whom? The customer? Why does that matter? If I phone a restaurant and place an order, is their telephone rate of any concern to me? Or their electricity rate? What relevance does this have?

unexpected 5y ago
well, for starters, their telephone rates and electricity rates don't vary on the price of the order.
- qeternity 5y ago
  Of course they do. If I order a huge meal, they will use more electricity and gas (no matter how incrementally small). But the question remains: who cares? Their payment processor will charge by value. Do you demand to know who their payment provider is and what their terms are?
  - robertlagrant 5y ago
    I agree. This is all a red herring. I think the negative effects really come from the delivery suppliers also being the digital shop fronts, so it's not easy to just switch to another delivery company, nor to start a competing delivery company.
aga_ml 5y ago
I prefer price transparency because it helps me decide whether to order directly through the delivery app or via the restaurant. The extent to which I support the restaurant is a factor in my purchasing decisions in addition to the total cost. Having good restaurants that are profitable near where I live is helpful for maintaining the community (and good for property values).
- qeternity 5y ago
  The restaurant is in a much better position to make that decision though. Uber might have high fees and it still might make for phenomenal business. But you would judge the high fees and go somewhere else thus harming the business. Capitalism isn’t perfect but this is pretty elementary stuff. Information asymmetries are why price is so important: it encapsulates everything.
gnicholas 5y ago
Opaque fees that vary based on method of request annoy me in the same way that fees that only appear at the end of the purchase process. They affect my decision whether/how to order, and they cause me to spend time going down one path when I would have otherwise gone down another. I recall seeing discussion of how Yelp (I think?) was routing users to proxy phone numbers for businesses, and then charging them a referral fee based on order size. Pretty much everyone commenting thought that this was inappropriate. Would you agree? This seems to be pretty close to your example about telephone rates.
- SllX 5y ago
  Yelp was behaving in a morally if not legally fraudulent manner by having up until that point presenting their service not as a reservation system to the customer, but as a Yellow Pages. They didn’t say this is a number you can use to reserve through Yelp; they presented it as the business’s phone number, and without informing either businesses or customers that they changed up. Of course now they’re in the reservations game. That said, these commissions are a COGS/COSS item that customers don’t actually need to know about. I don’t need to know that you bought your cheesecake at $30 and are selling it for $60. I don’t need to know the cost of the time it took the employee to stick it in a box and ring me up. And I certainly don’t need to know any of the overhead costs. I’m not asking to review your P&L just to determine if you are receiving a fair amount for your goods and services, nor should your books be open to me. I trust that whatever price you set is the price you are okay with receiving for your goods and services. If it isn’t, raise them or close and do something else with your life.
  - bryanlarsen 5y ago
    > If it isn’t, raise them or close and do something else with your life. They don't have that option. The contracts stipulate that delivery prices (before fees are subtracted) cannot be higher than the lowest price. So you can't charge 30% more for Uber Eats to cover the fee vs customer pick-up or dine-in. In a fair market restaurants could negotiate the clause out of the contract, but of course nobody except the really large chains have any negotiating powers against Uber.
dwaltrip 5y ago
If the telephone company charged 20% of the order value whenever you ordered by phone, maybe you would find that relevant?

unexpected 5y ago

well, for starters, their telephone rates and electricity rates don't vary on the price of the order.

qeternity 5y ago
Of course they do. If I order a huge meal, they will use more electricity and gas (no matter how incrementally small). But the question remains: who cares? Their payment processor will charge by value. Do you demand to know who their payment provider is and what their terms are?
- robertlagrant 5y ago
  I agree. This is all a red herring. I think the negative effects really come from the delivery suppliers also being the digital shop fronts, so it's not easy to just switch to another delivery company, nor to start a competing delivery company.

aga_ml 5y ago

I prefer price transparency because it helps me decide whether to order directly through the delivery app or via the restaurant. The extent to which I support the restaurant is a factor in my purchasing decisions in addition to the total cost. Having good restaurants that are profitable near where I live is helpful for maintaining the community (and good for property values).

qeternity 5y ago
The restaurant is in a much better position to make that decision though. Uber might have high fees and it still might make for phenomenal business. But you would judge the high fees and go somewhere else thus harming the business. Capitalism isn’t perfect but this is pretty elementary stuff. Information asymmetries are why price is so important: it encapsulates everything.

gnicholas 5y ago

Opaque fees that vary based on method of request annoy me in the same way that fees that only appear at the end of the purchase process. They affect my decision whether/how to order, and they cause me to spend time going down one path when I would have otherwise gone down another. I recall seeing discussion of how Yelp (I think?) was routing users to proxy phone numbers for businesses, and then charging them a referral fee based on order size. Pretty much everyone commenting thought that this was inappropriate. Would you agree? This seems to be pretty close to your example about telephone rates.

SllX 5y ago
Yelp was behaving in a morally if not legally fraudulent manner by having up until that point presenting their service not as a reservation system to the customer, but as a Yellow Pages. They didn’t say this is a number you can use to reserve through Yelp; they presented it as the business’s phone number, and without informing either businesses or customers that they changed up. Of course now they’re in the reservations game. That said, these commissions are a COGS/COSS item that customers don’t actually need to know about. I don’t need to know that you bought your cheesecake at $30 and are selling it for $60. I don’t need to know the cost of the time it took the employee to stick it in a box and ring me up. And I certainly don’t need to know any of the overhead costs. I’m not asking to review your P&L just to determine if you are receiving a fair amount for your goods and services, nor should your books be open to me. I trust that whatever price you set is the price you are okay with receiving for your goods and services. If it isn’t, raise them or close and do something else with your life.
- bryanlarsen 5y ago
  > If it isn’t, raise them or close and do something else with your life. They don't have that option. The contracts stipulate that delivery prices (before fees are subtracted) cannot be higher than the lowest price. So you can't charge 30% more for Uber Eats to cover the fee vs customer pick-up or dine-in. In a fair market restaurants could negotiate the clause out of the contract, but of course nobody except the really large chains have any negotiating powers against Uber.

dwaltrip 5y ago

If the telephone company charged 20% of the order value whenever you ordered by phone, maybe you would find that relevant?