Comment by gnicholas | Hacker News Reader

Comment by gnicholas | Hacker News Reader

Lots of the commenters seem to think (as I did before reading the article) that this is capping how much delivery services can charge the customer, but it's actually about how much they can charge the restaurants. This distinction actually makes some sense because the former is explicit and the latter is hidden.

I don't love delivery fees and practically never have food delivered, but I would not want to see the customer-facing fees capped. They are explicit fees, and people can choose to pay them or not to have food delivered.

The thing that is being capped here is more opaque — it's the fee the delivery service charges the restaurant. This fee results in the restaurant raising the price of food (which in turn increases this fee slightly).

This price adjustment is not transparent to the customer, so I'm more open to having it be regulated. I would prefer that instead of capping the fee, that it be made transparent.

That way the information is out in the open and everyone can make their decisions with a full understanding of whom is being charged what.

Also, this rule has not been finalized yet — there's apparently another vote remaining.

I don't disagree exactly. On the other hand, restaurants pay lots of service providers money--albeit not typically pegged to the price of a meal. So there's no real transparency to what "your" money is going to.

> This distinction actually makes some sense because the former is explicit and the latter is hidden.

Hidden to whom? The customer? Why does that matter?

If I phone a restaurant and place an order, is their telephone rate of any concern to me? Or their electricity rate? What relevance does this have?

well, for starters, their telephone rates and electricity rates don't vary on the price of the order.

Of course they do. If I order a huge meal, they will use more electricity and gas (no matter how incrementally small).

But the question remains: who cares? Their payment processor will charge by value. Do you demand to know who their payment provider is and what their terms are?

I agree. This is all a red herring.

I think the negative effects really come from the delivery suppliers also being the digital shop fronts, so it's not easy to just switch to another delivery company, nor to start a competing delivery company.

I prefer price transparency because it helps me decide whether to order directly through the delivery app or via the restaurant. The extent to which I support the restaurant is a factor in my purchasing decisions in addition to the total cost. Having good restaurants that are profitable near where I live is helpful for maintaining the community (and good for property values).

The restaurant is in a much better position to make that decision though. Uber might have high fees and it still might make for phenomenal business. But you would judge the high fees and go somewhere else thus harming the business.

Capitalism isn’t perfect but this is pretty elementary stuff. Information asymmetries are why price is so important: it encapsulates everything.

Opaque fees that vary based on method of request annoy me in the same way that fees that only appear at the end of the purchase process. They affect my decision whether/how to order, and they cause me to spend time going down one path when I would have otherwise gone down another.

I recall seeing discussion of how Yelp (I think?) was routing users to proxy phone numbers for businesses, and then charging them a referral fee based on order size. Pretty much everyone commenting thought that this was inappropriate. Would you agree? This seems to be pretty close to your example about telephone rates.

Yelp was behaving in a morally if not legally fraudulent manner by having up until that point presenting their service not as a reservation system to the customer, but as a Yellow Pages. They didn’t say this is a number you can use to reserve through Yelp; they presented it as the business’s phone number, and without informing either businesses or customers that they changed up. Of course now they’re in the reservations game.

That said, these commissions are a COGS/COSS item that customers don’t actually need to know about. I don’t need to know that you bought your cheesecake at $30 and are selling it for $60. I don’t need to know the cost of the time it took the employee to stick it in a box and ring me up. And I certainly don’t need to know any of the overhead costs. I’m not asking to review your P&L just to determine if you are receiving a fair amount for your goods and services, nor should your books be open to me. I trust that whatever price you set is the price you are okay with receiving for your goods and services. If it isn’t, raise them or close and do something else with your life.

> If it isn’t, raise them or close and do something else with your life.

They don't have that option. The contracts stipulate that delivery prices (before fees are subtracted) cannot be higher than the lowest price. So you can't charge 30% more for Uber Eats to cover the fee vs customer pick-up or dine-in.

In a fair market restaurants could negotiate the clause out of the contract, but of course nobody except the really large chains have any negotiating powers against Uber.

That’s also not my business, but point of order: I know several businesses that do exactly this, where the price on DoorDash is about 15-20% higher than what I pay ordering in the restaurant.

These are not your fees. These are the fees the restaurants pay. All of their other fees are opaque to you. You have no idea what they pay for their raw ingredients, and why should you?

Raw ingredient suppliers do not charge restaurants a percentage of their sales, which is what these companies are doing. I don't necessarily think these fees should be capped, but I think it's worth considering whether they should be made more transparent.

If the telephone company charged 20% of the order value whenever you ordered by phone, maybe you would find that relevant?

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