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Comment by andrewla | Hacker News Reader

The problem is that this response is in the wrong direction. By forcing prices lower, we guarantee that only over-capitalized predatory businesses can compete in the space.

The problem is that consumer advocacy and anti-monopoly are practically the opposite thing. The end result of government action here should be short-term higher prices to the consumer, that reflect the actual cost of operations, rather than lower prices to the consumer (i.e. "free delivery") that is achieved by pricing at a loss to drive out competitors.

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> we guarantee that only over-capitalized predatory businesses can compete in the space.

Assuming you can't make money at 10%, why would even a well-capitalized company that's OK with having a loss leader enter that market? The Uber strategy has been to enter a market fast, drive competitors out (possibly taking a loss), then (and looking at their earnings, this never happened, probably because there's a competitor in most of their markets) raise prices and finally turn a profit. If you can never turn a profit, why would you enter the market?

Because you’re funded by investors who have been lied to about eventual automation.

Netflix delivered DVDs at a loss to build a brand and content licensing for their streaming service.

AFAIK Netflix still delivers DVD's at profit.

Was that really the case? Netflix delivered DVDs for a decade before it started online streaming.

If I remember correctly Netflix’s original business model was more like a gym membership than brand building for an online platform that was a decade in the future.

>Netflix delivered DVDs at a loss

source? I've never heard that one before

Because they want to make a bet on the future being different. Or they just want to pump up the company's value enough that the initial investors can get out with their cash and leave the shareholders/acquirer holding the bag.

If the delivery companies start shifting the burden to consumers, or if they start forcing bicycle couriers to comply with the rule, or if they can successfully contest it in court, then it makes sense to some degree to stay in the fight.

> If you can never turn a profit, why would you enter the market?

Because you can still raise money, sell your company, and make money in the process. An extreme form would be a pyramid scheme where early investors make lots of money, leaving later investors with the problems.

Isn't the 10% cap making the end game of monopoly and higher prices impossible though?

Only if they don't change it in the future in response to "market forces", or if they start charging consumers fees directly or some other workaround and then the city council has to retract this guidance because people are complaining about the higher prices.

The restaurant should get paid regular price for their food and maybe even a little extra to cover boxing it nicely for delivery, keeping it warm. The delivery company should charge the customer the price they need pay to have it delivered to them. I expect the 10% max fee if around the margin the restaurant is making so I'm not sure this fixes anything.

Food delivery is an awesome service but it costs money, consumers should expect to pay a higher right for food and grocery delivery in the long term.

And delivery companies should expect smaller margins for coordinating it.

You think all of that hasn't been tried already? Why would the delivery services leave free money on the table if it worked? Consumers would not pay those high costs in enough numbers to make it work so we end up with this model. It's a very price sensitive market.

OTOH, maybe the restaurant should get paid less for the food because the patron isn't tying up a table, isn't using the restroom, isn't consuming any water/ice, isn't creating any linen/silver/plates/glasses that need washing.

I'm just repeating what another comment said. The 10% cap doesn't include the delivery fee. It's about the price of the food. Delivery services can't charge more than $55 for $50 worth of food but they can still charge $10 for the delivery if that is what it costs.

> "consumer advocacy and anti-monopoly are practically the opposite thing."

Only true in the short term. Long term, monopoly prevents competition and is bad for consumers.

They aren’t forcing prices lower. The companies are free to charge a higher delivery fee.

You realise free shipping on ebay and amazon is.. anything but free right?

Yes, but neither is the rent for an in-store experience. Having the item of the price subsidize the shipping vs. pay the merchant's rent is not all that different.

You realise merchants have to pay fees on ebay/amazon too right?

Maybe that's whats next -- online only restaurants. Food made in a warehouse.

Or in the vehicle that delivers it to you, like Zume Pizza.

Wouldn’t last long. Perhaps if most energy was removed first.

Then local depots could store them in thermal insulators.

Not sure if anyone would ever eat a pizza that has stored below freezing point

> Not sure if anyone would ever eat a pizza that has stored below freezing point

DiGiorno would like a word.

I keep a stock of various Totino's pizzas in my freezer at all times.

Portland already has them. Started infesting the city last year: https://www.wweek.com/restaurants/2019/11/12/at-delivery-onl...

A turnkey solution for delivery-only restaurants

https://www.cloudkitchens.com/

Deliveroo already does something a little like that:

https://foodscene.deliveroo.co.uk/promotions/deliveroo-editi...

They take existing, established chefs or restaurants and clone the cuisine so that the food can be produced in a larger kitchen, potentially reaching a wider delivery area.

It's funny you explained that concept way better in a single sentence than that whole 'explainer' 10 paragraph page on Deliveroo's site.

"We combine our customer insight, logistics experience and relationships with restaurants all over the world to bring an Edition to you." blah blah.

Generic corporate speak is so overrated.

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