San Francisco Emergency Order Says Delivery Apps Must Cap Restaurant Fees at 15% | Hacker News Reader

San Francisco Emergency Order Says Delivery Apps Must Cap Restaurant Fees at 15%

sf.eater.com

43 pointsanalyst7419 comments

I don't understand how these apps get away with such high commissions. Some of these are 30% of the total order. For someone to deliver the food.

And they already charge a service fee and a delivery fee to the customer. Double dipping bastards all of them. Their platform can't cost that much to run either, no need for such high margins.

I was thinking the same thing. I used Doordash a while back and figured they were making good money based on the fees they were adding in, such as delivery fee, service fee, tips to the driver, maybe a markup on menu items. But then I discovered they are also charging commission to the restaurant for up to 30%! I've been driving to restaurants for takeout more often because the apps seem shady to me.

The restaurants could just offer delivery (in the US I've seen some Chinese and Thai restaurants do this). Where I live a lot of restaurants don't care enough about the commision to save by hiring a delivery driver (as in I've called because my friend was going to swing by to pick some up, and we got told to just order delivery off an app). On the other hand the more expensive western restaurants are more sensitive to delivery apps and offer their own delivery. It makes sense that they're sensitive to 20% or even 30%. English teacher asistants get paid around 25k/hr, and western places charge 100k-140k per dish. On the other hand you can get a meal for 40k at more local restaurants.

Strangely enough, a lot of milk tea stores are cheaper through delivery... A drink might be 50k or 60k in store or pick up, but through delivery apps they offer them for 20k-30k.

You can make a milk tea in a rat infested hellhole if it’s being delivered.

as long as its on a rapid boil then it sounds like every trip to India I’ve ever taken. This comment has no substance. Just a random thought.

Although in this case the locations are the same. Just like in the US, the delivery drivers go inside to pick up the orders. Ghost restaurants aren't really a thing yet here.

All the prices are marked up, there's a service fee, a delivery fee, and oh yeah, you're definitely expected to tip lol.

I admit though, it's pretty sweet and I've been using it for a few places while there's free delivery!

For other places, haha. Pizza hut's $10 pizza costs $20 + tip when you order it for delivery, with all the fees. o_O

I agree. You should start a competing business with lower prices and and drive them out.

Guess what? It costs more than $3 to drive a $10 order to your apartment.

Surely the delivery cost is independent of the order cost?

I think the order cost increases the variability of the delivery cost. Anecdata, but I have noticed for larger orders, the driver often spends more time at the restaurant waiting for the order to be ready. Ideally the delivery company would know when it will be ready; but that comes with a certain risk that they are late, which means cold food. And to add on to that, if customers complain about cold food, the larger the order means the larger the refund (hopefully).

I’m sure this will have no unintended consequences...

It's fine. Just like with the freelancer's law, local restaurants and delivery services will be replaced by out of town ones. So you'll be able to get dinner delivered from Palo Alto instead.

Plenty of time to preheat the oven for your cold delivery.

This will be an interesting natural economics experiment. An economist would say that it shouldn't matter- that as long as restaurants can adjust prices, and consumers are price sensitive, that the total delivery cost should stay about the same.

Curious what will happen.

If the restaurant raises menu prices then pick-up orders would be more expensive. Maybe they don't want to do that?

Another possibility might be that delivery services charge more to consumers. Apparently some delivery services waived fees during the crisis? They could stop doing that, keeping their revenue per delivery the same. (But this would encourage consumers to switch to pick-up.)

They can raise menu prices and offer a pickup discount. Chinese restaurants near me have been doing this for as long as I can remember.

Perhaps a better approach would be a combination of consumer price transparency and banning exclusivity agreements. That way a combination of public shame and competition ought to make this problem go away.

The local curry house isn't the iOS app store. If they charge too much for delivery you can easily buy from someone else. Especially if it's delivery and you don't have to go to the shop.

Why %? What is the correlation between cost of a food order and cost of delivery? There is none.

This is absurd politician's syllogisming.

Seems like the restaurant industry should be super grateful. Without these delivery networks, most restaurants would have totally shutdown and have no hope of surviving.

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