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Comment by rattray | Hacker News Reader

IDK, this seems more like a mixed-bag to me on account of being opt-in instead of opt-out. Absolutely I agree that businesses should be able to easily opt out of being listed on a given delivery platform if/when it causes problems for them.

But on the flip side, I've observed a lot of restaurant owners not having the time, energy, or know-how to set up even basic online things that could really boost their business.

I would expect that many restaurants really benefited from Doordash adding their menu to their website without their knowledge (even if some have, in net, suffered).

Going straight to opt-in seems like it could hurt some businesses.

Not to mention, of course, any new entrants! This law will make it much harder to compete with "the next Doordash".

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> But on the flip side, I've observed a lot of restaurant owners not having the time, energy, or know-how to set up even basic online things that could really boost their business.

Isn't part of being a successful business knowing where to put your energy as a business owner? You're saying that restaurants don't necessarily have the ability to make the best decisions for their business, therefore they should be able to opt-out and not opt-in. The flip side of this argument is that these apps can cause undeserved damage to a restaurant's reputation. How do you know what's best for restaurants?

You're arguing that the onus should be on the restaurant to opt out whenever a delivery platform causes problems, but the onus should be on the delivery platforms to create a product that restaurants, not just consumers, want to use.

This is already the case with bigger companies. As is the usual case with a lot "disruptive" firms, that "growth hacking" comes from exploiting some regulatory loophole that no one else has seen yet (e.g. most things related to the "sharing economy").

I'm pretty sure if I just declared myself to be a sales partner (idk the term?) of Cisco, IBM, Oracle, etc and just resold their gear, I'd be in hot water legally because my actions would reflect on them.

There is nothing illegal about purchasing hardware products from those companies and then selling them on to other customers, even without a formal sales agreement in place. This is the first sale doctrine. However software is different and licenses can't necessarily be resold.

And, of course, many hardware products do have software components these days. But, yes, in general you can resell hardware without a formal agreement. You just can't claim to be an authorized partner or reseller given that implies certain training levels, etc.

>I'm pretty sure if I just declared myself to be a sales partner (idk the term?) of Cisco, IBM, Oracle, etc and just resold their gear, I'd be in hot water legally because my actions would reflect on them.

This is pretty much how local governments buy IT gear. Put out a "I want a router" low volume RFP that the tech companies don't want to bother with, and some local vendor will resell to you. Ideally, they're getting a volume discount and sharing some of it with you at least.

But don't those vendors have to have some sales agreement with Cisco? I'm guessing they don't after reading about it a bit more, but I'm just surprised.

Yes they do. They have a special website and phone line to order goods at a discount (in volume) and to get direct support/return.

Cisco/HP/Oracle/VmWare/Microsoft are all about sales network. Partners take care of the sale and they can take care of the installation on site and the servicing.

I'm sorry to say but B2B sales companies have nothing to do with restaurant delivery at all. It was a really really bad comparison.

> Isn't part of being a successful business knowing where to put your energy as a business owner?

If you own a small restaurant... are you really in it to be a tycoon of industry? Or are you passionate about the food and the community?

I know I want to spend as little time as possible thinking about sales and marketing, and just focus on improving my product and making my customers happy.

Most small restaurants fail within a year of opening. It’s a very tough business.

Some app claiming that you are partnering with them for delivery when that is not the case is not necessarily positive for a business given potential reputational risk.

> Most small restaurants fail within a year of opening. It’s a very tough business.

Why is that? Seems straightforward - exchange food for money. Why's that so difficult to make work?

As far as I can tell, every home for sale or rent in america requires a kitchen. So basically everyone is in competition with them.

1. there's lots of competition. restaurants are an extremely common business in existence and to start.

2. product market fit. you think your cooking is good. Do other people think your cooking is good? Do other people think your cooking is worth coming back for in a week, a month, or a year? You can try and do trendy things in food but these trends come and go quickly.

3. Rent and capital costs. It is expensive to fit a space for a kitchen, so you probably took a loan for that. Landlords are trying to squeeze every dollar they can out of you. There may be cheaper options than a leased space like a food truck or a sidewalk stand, but if they're even legal where you are the permits aren't cheap and there's usually a long waitlist. And better locations with more foot traffic cost more money.

4. Labor & management. Most people do not have experience running a restaurant's operations, which have to be tightly managed to both keep expenses down and keep service at decent levels. Bad service will turn customers away for good and bad word of mouth can snowball.

5. Margin. The tendency for new restauranteurs is that they underestimate their expenses and how much margin they need to be making. Prices need to be right for the market you're trying to serve, but you also need to not scare away too many customers. What pencils out in a home kitchen is not necessarily what pencils out in a restaurant.

> I know I want to spend as little time as possible thinking about sales and marketing, and just focus on improving my product and making my customers happy.

That's fine and understandable, but you also have to weigh the risks of delegating those responsibilities to external parties that don't necessarily care about your success because they have thousands if not millions of customers. Not to mention the restaurants that don't want any part of the delivery platforms altogether because they don't like what they're seeing.

In an opt-out model, the restaurant has to take time to deal with (and possibly remove themselves) from a platform that didn't ask for their business, potentially dealing with upset customers along the way. Wasn't the whole point of this idea to reduce time and energy spent on these kinds of activities to focus on the food and the community? If you had no idea that you were on one of these platforms and an angry customer reaches out to you, how does that benefit the restaurant?

It's really strange to see a collectivist for-the-greater-good argument being applied in a business sense here because it's based on two incorrect underlying assumptions: that every business owner wants the same thing (automated marketing and logistics services handled by one provider), and that platforms will always act in the best interests of their users. As a hypothetical business owner, shouldn't I have the right to prevent delivery platforms from using my restaurant without my permission? Say I get a bad experience with a delivery platform once, and I remove myself. Now I have a keep a lookout for any other platform that wants to use my name, all because those platforms made the argument that they know what's best for the restaurants and then didn't measure up. The road to hell is paved with good intentions.

> As a hypothetical business owner, shouldn't I have the right to prevent delivery platforms from using my restaurant without my permission?

> The road to hell is paved with good intentions.

We certainly agree on both of these counts!

> Not to mention, of course, any new entrants! This law will make it much harder to compete with "the next Doordash".

Well of course the law will make it much harder to compete to be the next predatory, deceitful company that pretends to be small businesses! That’s the whole point of this law. Some business practices are unethical and relying on them to grow should be made illegal.

Yeah, like I said, restaurants should absolutely have easy and fast recourse against predatory platforms.

The heuristic, "but will restaurant owners ask to be delisted because of this?" should be a powerful force for keeping overly aggressive product managers in check.

I worry that the bill misses the point that these platforms can also be a free or low-cost source of new business. As a small business owner myself (albeit e-commerce), free new customers doesn't sound so bad. (Obviously, for many established businesses, it's just cannibalization of their existing base - but that's not true for all businesses).

It’s true that these platforms can also be free or low cost sources of new business. GrubHub et al can still mail/call/etc. them an offer to become a partner, with stickers and a “congratulations we’d love to do business with your business”.

Totally. That's what'll have to happen instead. But it's more expensive (cost to restaurant ultimately goes up) and annoying.

If it’s costs more for the restaurant to do business with GrubHub then now they have the law on their side to decline to do business with GrubHub on account of it being too expensive.

>The heuristic, "but will restaurant owners ask to be delisted because of this?" should be a powerful force for keeping overly aggressive product managers in check.

You can just build a second or third site and relist the restaurant thereby avoiding the opt out law. Finally you can build an aggregator that allows customers to search all of your sites at once. The room for loopholes is too big.

I think your anger is blinding you to the fact that this law doesn't actually address any of those concerns.

Will there be a "next DD"? It seems that they were hard pressed to make money despite the pandemic. Who wants to pick up the baton and continue losing money?

What I don’t understand is: Uber at least had a vision (self driving) that VC could look forward to. What’s the end goal of these delivery apps that just bleed money?

Now that I think about it, I think this law could also hurt competition even amongst established players, allowing them to squeeze restaurants even harder.

Imagine platforms A, B, and C. Platform A approaches Daisy's Cafe offering an amazing deal on a delivery partnership, as long as the Cafe agrees not to use any other delivery companies. Daisy asks around and hears great things about Platform A, so she says yes – what a win!

Months later, the quality of Platform A starts going way down – food is delivered to the wrong addresses, delivered cold, etc. All of the restaurants in Daisy's area also deliver with Platform A, so the local customers don't use other platforms – she's stuck. If she switches, she'll lose almost all her delivery traffic overnight.

Now imagine if Platform C did delivery for her without an agreement signed. Daisy isn't breaking the agreement with Platform A when customers order through Platform C! She'll still lose business when she stops working with Platform A, but not as much, so it's an easier choice to make.

In this scenario, predatory platforms are more likely to squeeze restaurants if agreements must be signed, because exclusivity can be enforced.

Of course, the simple patch here is to disallow exclusive delivery platform contracts, but I don't see that in this bill.

We’re at a point with this pandemic that those who will purchase with delivery platform have likely developed some form of affinity towards a preferred vendor or two.

A bigger issue is that few restaurants will survive through the extended statewide shutdowns. Delivery is meant to be a small route of generating revenue, rather than the sole revenue stream. The overhead costs of a retail storefront and operations will destroy most restaurants, if it hasn’t already.

Separately, these delivery apps and services are terrible, unprofitable businesses. None of the platforms have turned a profit despite the once in a lifetime opportunity with all customers being locked inside... all these platforms are optimized to run on VC money as they are garbage ventures that cannot make money. The IPOs are rushed to give VC money a way out of the ticking timebomb.

Unless you think the pandemic has created a significant shift in consumer behavior with respect to takeout--like it probably has with grocery delivery--it's hard to see how delivery companies unable to make money over the past year will do so in the future. And I'm not sure why people would change. The overall take one hears is nice to have (even essential in some views) during pandemic, but expensive and unreliable.

The fact is that mainstream, even upper middle class, consumers won't en masse pay enough for some sorts of services to work when extended beyond the niches when it already does work.

What’s preventing them from doing this today?

I'm definitely under the impression that exclusivity agreements exist in this industry today. But the fact that some delivery apps list restaurants that haven't signed up with them reduces the power of the exclusivity (since some delivery traffic is coming from these other, "unofficial" apps).

If they don’t have the time/skill/capital to handle online business on their own, then they can set up a partnership with these companies. That is a minimal effort, no?

The key thing is this deals with a predatory practice.

Opt-in doesn't mean the delivery business has to just sit around hoping that restaurants will reach out to opt-in. A delivery business can contact the restaurants to ask them to opt-in.

How is a business to reasonably identify all the different platforms listing their info without their permission? Opt out isn't a good model.

There's also a _ton_ of these businesses that aren't tech savvy. It's way too big an ask

I realize you're not suggesting this, but it unnerves me that the way to deal with a weak link in a business is to commandeer that business and blow it out of the water. That's the whole "disruption" culture. All it shows is that a weak business can be destroyed, not that a strong one can be built up.

For a restaurant to work, those basic online things have to be coupled to the production and delivery subsystems. The whole machine has to work. This can only be tested by building a working restaurant.

Some delivery platforms masqueraded as restaurants to customers and customers to restaurants. How can they opt out if they don't know it's happening?

It reads like what dropshippers did.

> Going straight to opt-in seems like it could hurt some businesses.

So, Facebook is indeed right when they say Apple’s opt-in tracking prompt will hurt small businesses?

Can you explain how this has anything to do with tracking?

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