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.
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.
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.
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.
> “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.
Do delivery apps charge "delivery fees" to restaurants as well as to the customer? Yes, the ordinance applies to restaurant charges, but this provision reads ambiguously to me, as I don't know if third-party platforms charge the restaurant a delivery fee while also charging the customer a (possibly different) delivery fee.
They can't charge a restaurant a big delivery fee. Whether they are or not currently is immaterial; that wording prevents them from going "fine, we won't charge commission, we'll just tack on a different fee that replaces it".
Legislation often includes these sorts of "we know you think this is a loophole, it isn't" wordings.
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.
This forces Uber to more clearly tell the customer how much their convenience costs, but it can be anything Uber wants.
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.
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.
One can argue that food delivery isn’t really just a “luxury,” but probably best in terms of preventing spread during the coronavirus pandemic.
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.
A better analogy would be extra baggage. I appreciate being able to save $25-$50 in domestic flights by not bringing an extra bag.
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.
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.