Chicago will now require food delivery apps to disclose itemized cost breakdown
nbcchicago.com
nbcchicago.com
* A way to order and pay online.
* Details on their contactless pickup procedure if I drive there. I want them to bring it to my car, then I can unlock my trunk, and they can place it inside and close it.
If they did this, my use of these food delivery apps would drop to almost zero. I don't mind driving to pickup my food, it's even good for my car which has been sitting idle for weeks. But I want it to be contactless pickup. If bringing it to my car is too hard, I might even be ok with waiting outside their restaurant, text them, and they bring it out and place it on a table.
But these restaurants have no plan, put no effort into adapting, then complain about high fees for food delivery apps. I don't like these expensive apps either, please provide an alternative!
If they knew how to maintain the web site you want, they'd probably be in a better paying, more academic career.
Disclaimer: This is just my impressions from the outside. I know nothing. But I doubt mom or pop will show up on HN to tell their story.
And that 30% isn't in stone. Last place I worked at, they were able to negotiate for 15% because of how desperate Uber was.
It would allow users to understand this isn't free and actually pay for a subscription that essentially does this.
This regulation creates an opportunity for new business models.
Non profit does not mean free. People can be paid salary, but the business does not need a 30% Profit margin.
Frankly, I feel something like peach which bundles multiple orders from a few restaurants is the way to go if you want to make money as a food delivery service.
Just enough to pay their workers and themselves.
This really depends on their margins.
Here's how you add a Menu to your restaurant's Facebook page: https://www.facebook.com/help/533179700126832
To me a business that is only on Facebook doesn't exist as far as I am concerned.
No one needs web developers anymore, you just need to sign up for a wix account it will do everything /s
Fuck! I routinely cannot get through to restaurants that I ordered from, without a lockdown in place.
It's 100x worse now.
Then there's the benefits of online - menu is accessible, often they're using stripe/Shopify so my payment info isn't everywhere, it's one click, I get email confirmations and receipts, I can leave free form notes easily, and last but not least, I don't have to talk to a person who may or may not want to talk to me.
That's a little excessive given there are lots of customers and only a handful of restaurant workers.
What I have seen restaurants do is that they put your food on the tables (which are idle anyway) with a number. If you tell them who you are when you walk in, they tell you the number and you can pick it up without interacting with people.
What sucks about the other 40% is half of them are "our door is locked, pay a delivery service" and the other half are "use our drive-thru and if you come in anything other than a vehicle with a license plate we will yell at you." I don't want to do the former because delivery people seem incapable of working out where I live and I can't do the latter.
Probably not practical in big cities, where parking can be haphazard, but many restaurants have parking lots right in front.
What you're asking for sounds like science fiction.
i bet that there's a way to turn this sort of need into a utility that can be provided with a very simple method. It used to be very difficult to operate a telephone when it was new. Now it's ubiquitous. Calling somebody meant looking up their number in a phonebook. And it is because of standardization.
So i propose that all businesses standardize in describing what they sell - make this a requirement by law, and there will be companies that can provide cheap services to do this task for them. Using this standardization process, online ordering and other (like inventory tracking) can also be "standardized" in such a way that makes it outsource-able.
My neighborhood bar hasn't updated their Facebook page in years.
The science fiction is bit_logic's requests from up at the top of the thread:
* A way to order and pay online.
* Details on their contactless pickup procedure if I drive there. I want them to bring it to my car, then I can unlock my trunk, and they can place it inside and close it.
Are you that terrified of making a phone call?
If it's a small restaurant, just ring up and ask them how you'd like to pick up the food!
Crazy.
If you're worried about exposure, someone still prepared your food, touched it in the kitchen, brought it out to your car...
And now every customer after me won't be exposed to me, either.
However, no one in our house is in a high risk group. We’d rather get one of the two strains that are common now (preferably the first one!) than roll the dice with whatever’s common during the second surge later this year.
Customers should also be confused that…
* Paying $1.99 for an app doesn’t mean the developer receives $1.99.
* Buying a product on Amazon when your browser has a referral cookie means the full cost doesn’t go to the seller.
* Buying a pack of Oreos at Walmart doesn’t mean that Nabisco gets $3.
* Paying $17 to see a movie doesn’t mean the theater gets all of it.
* Buying a game on Steam…
* Buying a flight on a Travelocity…
* Getting a hotel through hotels.com
* Renting an AirBnB…
Like this list could almost literally go on forever.
The acceleration of information diffusion means that no one's margin is safe anymore and why we have Bezos' favorite aphorism "Your margin is my opportunity".
Historically, margin was not the opportunity except maybe between grocery stores or gas stations (businesses where discovery of two or more providers of the same good/service was trivial and all where easily accessible to the customer). Historically, simply providing the customer with the product or service they need was the opportunity. It was only when discovery became easy (first the yellow pages, later the internet) and competition ceased being local (first franchises, later the internet) that margins eroded across the board.
Isn't the standard argument based on increased productivity?
People would give a lot more thought to taxes if they added up all the different ways the government nickels and dimes them.
People don’t want to relax by auditing taxes.
To use your example, when I rent an airbnb, yes I absolutely want to know how much Airbnb is pocketing. Airbnb happily discloses this as an itemised "Service Fee", and they charge hosts a fair 3% fee to cover payments processing.
When I hire a cleaner on Thumbtack, I absolutely want to know how much the cleaner is paid. I want to make sure everyone is earning a liveable wage.
And when I order something through a delivery app, I absolutely want to know how much the restaurant is paid.
Food delivery is being singled out here because of pure politics.
Your AirBnb example by the way is a perfect example. The 3% service fee is the amount charged to the host by AirBnb. They also have a separate charge which they bill to the renter;
> Guest service fee: This fee is typically under 14.2% of the booking subtotal (the nightly rate plus cleaning fee and additional guest fee, if applicable, but excluding Airbnb fees and taxes).
I’m counting a total of at least 5 different line items for taxes and fees. Not all of which will be broken out on the renter’s invoice.
Like when renting a car at the airport, eventually you stop paying attention and just look at the total. You’re only amazed after taking a second look that taxes, fees, concession recovery, environmental etc. fees make up more than half the cost.
Can you guess if I'm giving a fuck if the middlemen take 90% of your income?
I think I lost my airplane ticket money through eSky.eu as well. We'll see. We're still in the "we have forwarded you request to the airline" phase. The trip was cancelled because we got the more expensive "free cancellation" option from bokking.com.
Booking.com also tried to push some friends into getting vouchers instead of money back, but they eventually got their money back after contacting support and making threats.
I would rather deal with Booking/Expedia and get a voucher, than deal with assholes.
Airlines will be forced to give you options, but private hosts will do fuck all. Do you know why? Because the host is still giving me the right to come to Croatia... it's not his problem that the borders are closed.
These middlemen are insurance for the consumer. Be it Booking, GrubHub, AirBnB, Uber, etc...
When was the last time you bought a product or service and they did tell you what their margins were?
I don’t know why you think it’s your business to know who is making what. I don’t need to know the salaries of all the engineers at Thumbtack. No one who works for them is a slave. They can quit if they don’t like their compensation. I don’t need to stick my finger in their business and start making demands when I don’t have an inkling of what their financials and contracts even remotely look like. I hope their clearers make a liveable wage, but for someone with no real competitive skills, just having a job may be all you can ask for. If we fix a certain wage floor, some people could end up without a job at all.
Labor markets are hard to regulate well. There are cases under monopoly or monopsony conditions where it’s desirable to do so, but “I just don’t like that” isn’t cause to interfere with efficient markets. You can’t regulate the world to perfection.
I would also like to see how much restaurants are paying their cooks, waiters, busboys and deliverymen. Some restaurants don't deserve my custom.
PS: AirBnB is a shitty example, as host cancellation rates are ridiculous.
I'm a consumer and I don't give a hoot about what kind of "policies" AirBnB offers. I've had hosts cancel a week beforehand, without explanation. Thankfully they paid me back, but rebooking was triple the price.
That's literally the reason why I will only book at chains, that can upgrade or shuffle me around their networks at worst.
Then why even have your restaurant on the app?
More and more, it seems like "restaurant" is not a viable business. They already don't pay their employees, offloading that on to customers via tips. Where does all the money go? Rent, I guess.
> it wasn’t always this way — margins used to be double, if not triple, what they are now. But for the past couple decades, while menu prices should have been rising to keep up with things like inflation and rapidly increasing rent, price wars instead drove them down ($1 value meal anyone?). All this eroded margins til restaurants were left with nothing but bread crumbs. This failure to manage expectations has simultaneously obliterated margins, all the while skewing and reinforcing our perception of what food should cost.
It's supply and demand. Our perception of what food should cost has nothing to do with it (and this argument is an unhelpful culture war framing). Food is in extremely abundant supply. Same goes for cheap restaurant labour (which is often dodging labour laws). What is scarce in this equation is real estate in high traffic locations. That is why rent goes up and margins go down.
During the virus lockdown, restaurants are trying to operate a low margin business (food service) while paying high rents for valuable real estate they aren't benefitting from, at all. You don't need a fancy restaurant in a high-traffic urban location to prepare orders for delivery. You'd do just as well with a commissary kitchen in a warehouse somewhere.
I can only count one restaurant that surprised me with quality, while a few Michelin star places disappointed here in NYC.
But that's a result of food production becoming better and more efficient, while mid-range and high-end restaurants are standing mostly still. I still get the same service and same quality of food from Milos today as I got 20 years ago... and prices only went up. Meanwhile Popeyes and McDonalds have improved dramatically in the last 4 years alone!
Unfortunately it took this pandemic for restaurants to start feeling the burn from their conservativism.
To help with this+, big US cities have for the past several decades set about making building competitive housing stock more expensive. Because some hope to escape this through a commute, these cities have also been spending more and more money than ever to build increasingly less-effective transit systems!
(+ To help make it worse)
Some cities have mandatory health coverage too, and some restaurants cover that without a mandate, but the increasing cost of health care is a snafu that goes all the way up to the federal level, and discussing that will be far less productive.
This is one of those free markets that is directly at odds with the freedom of other markets to operate. Unfortunately I don't see us fixing it any time soon.
Grubhub was known to list restaurants on their app without their permission, mark up the prices and then pocket the difference. Is this not the definition of rent seeking behavior? They're forcefully inserting themselves as a middle-man so that they can siphon money off the top. Regardless of how you define providing a service (landlords are 'providing locational support services') a lot of how Grubhub functions is by obfuscating costs and skimming off the top.
PS: Forcefully inserting? Do they hire goons to force themselves onto the customer?
You don't get to say what someone does with your product once you sell it. They're free to resell it as their own service.
If Grubhub acted like a reseller and took on the associated obligations you'd be correct. But they don't. So first sale doctrine does not apply.
They also in fact do not pass on the liability, but frequently make me whole when the food is not up to standard. Have you even used doordash or are you just trying to bash them?
Like it would be quite the sales pitch “join our platform and lose money!”
This law makes the first part of that illegal.
https://www.theverge.com/2020/1/29/21113876/grubhub-seamless....
I believe DoorDash or Grubhub actually got sued for this and lost.
Let's say Grubhub lists a restaurant at 130% of normal menu prices so that they can earn their cut. The perception isn't of restaurant 100% + Grubhub 30%, it's restaurant 130%.
I’m surprised they haven’t been successfully sued for libel.
https://www.law360.com/technology/articles/1272537/bar-says-...
DoorDash got in trouble for even taking the tips recently enough!
Tip in cash if you must use DoorDash. I switched to carry out, or delivery direct from the restaurant. It saves a surprising amount of money and helps local businesses.
More price transparency in everything, plane tickets, medical care, these third party tack on services that shame people into tipping... Bring it on!
Wholesale unit price: $1.40
Retail storage fee: $0.60
rather than
Box of cereal: $2.00 ?
(Not saying that's necessarily a bad idea, just a thought.)
Note: This came up before and I made the same point: https://news.ycombinator.com/item?id=18677023
Looking at this recursively I don’t need the restaurants’ price breakdown, but I think I want to know what the restaurant gets from me if I buy direct vs when we use these services.
Same with Uber vs a regular taxi. I want to know their vigorish.
Same with hospitals and doctors. I want to know if I’ll be paying $100 for a Tylenol when I can go down to their own pharmacy and get one for pennies.
The problem with hospitals, is that you aren't even provided with an estimate beforehand. It's a completely different issue.
It's stuff like that which might justify rules for transparent pricing. Then, consumers can just avoid companies playing a lot of games with them. Or choose or be stuck with them due to other reasons. This is just one tool in the toolbox.
Don't like patchwork regulation as an interstate superchain? maybe you will get behind federal legislation.
There are a lot of grandmas and tech illiterate people buying laptops for incredibly inflated prices, from often smaller and more questionable computer shops. We're talking about 5 year old CPUs, 4GB of RAM, sometimes even a hard drive and no solid state drive.
If they had to disclose that the $999 laptop they're selling only costs $400 and they make a margin of $600 on it, and the consumer takes their money elsewhere and buys a genuinely reasonable laptop, I think that's a fantastic outcome.
In those situations I don’t see it as excessive—of course it would be contextual. And some of this is case-by-case.
There's a lot of examples of industries where the price of the actual materials used is not as important as the expertise/training/tools of the person who assembles/installs/prepares/etc it. A policy encouraging consumers to make decisions on margin would would favor companies that skimp on their employees and punish those who are smart about their materials costs. Ultimately, it could end up encouraging wastefulness and inefficiency.
Margins don't include operating expenses(ex salaries of employees)
Why only delivery apps are subject to transparency rules?
How will this change lead to confusion?
If not, why do you think anyone uses them?
I assume when you are looking at, say, getting a Netflix subscription, your first question is "what portion of my dollars are going to AWS, and of the dollars going to AWS, what go to Intel and of the dollars the go to Intel, what go to buying sand"?
A Netflix subscription is a not a middleman. Food delivery is a middleman: it processes orders on behalf of restaurants.
When I hire someone on Thumbtack, I'd LOVE to know how much of my % goes to the cleaner that actually comes and does the work.
When I buy something from eBay, I'd LOVE to know how much of my $155 bid goes to the seller, and how much if it is taxed by eBay.
When
Maybe for sending money and gifts, but not for payments. PayPal doesn’t list merchant fees when you check out.
If you pay with your bank account’s debit or credit card, you don’t see those merchant or interchange fees itemized anywhere either.
> Food delivery is a middleman: it processes orders on behalf of restaurants.
Food delivery also brings the food to your house. An ordering system processes orders.
But arguably you should - most people have no idea that they’re paying a large tax on all their card purchases to private companies.
In fact, if these charges were actually appended to the bill, I reckon we’d see proper competition in this space, as users would be incentivised to choose the lowest fee option.
Unfortunately EEA legislation has gone in the opposite direction and processing surcharges are no longer allowed, largely due to merchants taking the piss and making up surcharge numbers (but I’d also suspect some lobbying went on by payment processors here too, since this it’s in their interest to hide their fees).
This effectively means that customers are incentivised to use their Amex (which charges stupid fees to the merchant) and everyone ends up subsiding Amex users because prices must increase across the board to compensate.
If a payment processor charges (made up numbers):
* $100/month/account
* $250 flat hardware cost per POS
* $50/month/POS
* $0.30 + 2.9% per transaction for the first $10k transactions per month
* $0.25 + 2.5% per transaction for all transactions after $10k per month
* $50/hr technical support
... then what do you put on any given receipt?
Agreed that it does become complicated when you have multi-tiered fee structures like that though.... Also the fact processors charge different amount to process payments from different countries.
It definitely needs some thought - but the current state of things is not an ideal place (users incentivised to use expensive and inefficient payment solutions while private corporations siphon off large amounts of money from the economy just for the privilege of being able to move money around).
Otherwise no one will bother looking at it.
They do make original content now, but Netflix is in general the exact definition of a middle-man. You paid them monthly rent to deliver content created by others (via mailed disc or streaming).
Which of these services is extracting value right now? Even Grubhub I believe is now running at a loss or close to it.
What's missing in this is that you know how much those businesses are charging, but you don't know how much it costs for those businesses to provide their service.
End of the day, if you want delivery, what matters is which company, A or B, provides a delivery service that is faster, cheaper and better.
More from Chicago Tribune: https://www.chicagotribune.com/coronavirus/ct-food-coronavir...
More important as Uber tries to monopolize the space by buying GrubHub. These delivery companies are going to encourage fly-by-night/cloud kitchen operators to increase their margins and reduce prices on the already hurting restaurants. Wish a not-for-profit platform for delivery existed that didn't squeeze the maker or the delivery driver.
I’d switch to that in a heartbeat.
In the example invoice in TFA, how would they allocate the promotional fee without knowing in advance how many customers the fee will generate?
How would a consumer know what a fair delivery commission is? Was my driver carrying multiple orders on this trip? If so, should I reduce my tip?
Adding this kind of complexity to bills is silly when there are options like ChowNow out there that handle the website + app + booking part for a flat monthly fee. (And let the restauranteurs determine the difficulty of offering delivery themselves.)
* Order total: $34.00
* Paid to restaurant: $16.20
* Paid to Uber Eats: $12.30
* Paid to driver: $5.50
1) It does not take into account that driver comp and Uber Eats commissions may both well be on a sliding scale, where the percentages depend on order volume on prior days/weeks.
This will make it difficult for consumers to compare these fees across orders, making the actual numbers less meaningful. Did the driver earn less on this order because it's her first order this month, or because the restaurant doesn't do much volume, or because the driver was carrying 3 orders at the same time and delivery fees scale with mileage or time or some other metric, etc. The calculations may involve more context than is reasonable for a consumer to process.
2) This may reward the richer restaurants. Big restaurants & chains may negotiate better deals and get a bigger "Paid to restaurant" number. Choosing to display information to consumers in this fashion might incentivize people to choose bigger restaurant owners at the expense of small shops like those highlighted in TFA.
3) Doesn't address the invoice shared in TFA, where ~20% of the fee to GrubHub was for a promotion that could be CTA or the like and not directly tied to specific deliveries. So you could implement your suggestion and the restaurant could still post the same invoice & complaint.
does this mean the apps have to disclose the amount they're marking up the food from the menu prices in the restaurant?
I prepared a few DoorDash orders in the past, and noticed that what was normally about $60 for dine in was somehow $110 after a $10 delivery fee and a “50% off delivery” coupon.
At that point I started spot checking prices from menus on yelp. I don’t appreciate gaslighting, and haven’t used DoorDash since.
Why stop there? I want to know how much of my chicken dinner was labor, the chicken itself, and the spices.
The delivery companies aren't cheating anybody. It's not like they change the price after the fact on either the restaurant or the consumer.
Lori is doing this to what... get people to bully the delivery companies?
Suddenly delivery companies are getting accused of being greedy because... they're suddenly in demand?
Has this been in the works a while, and the app and site makers knew it was coming, or do the app and site makers really only have 10 days to design and implement this?
consumers are starting to care
What do you think is going to happen? They're going to charge less?
transparency gives consumers the ability to shop on fairness
'we pay our workers better and don't stiff restaurants' isn't a line anyone has every used to sell a product but 'fair trade' has been a real thing for a few decades now without transparency
if adding in the transparency justifies a higher price (big if), the luxury consumer economy changes for the better
https://www.nj.com/hudson/2020/05/uber-eats-slaps-surcharge-...
https://ny.eater.com/2020/5/12/21256244/food-delivery-fee-ca...
Now delivery services have to compete directly on the fee they charge customers. Before, the customer had no idea if one service was charging a restaurant 20% and another was charging 30%, which is effectively one service subsidizing another.
There is 3 visible actors in each order on these apps. The restaurant, the app and the delivery man are all independent and are putting their reputation on the line.
Knowing how much each received is the only way for me to decide if I received the value I expected from each of those actors.