San Francisco will permanently cap food delivery fees for apps like DoorDash(sfchronicle.com)
sfchronicle.com
San Francisco will permanently cap food delivery fees for apps like DoorDash
https://www.sfchronicle.com/food/restaurants/article/Food-app-delivery-commission-in-S-F-capped-at-16266468.php
24 comments
>Or maybe just stop offering delivery in less profitable cases
With how ridiculous the fees are Id prefer this personally. Delivery once upon a time was free for pizza or a few dollars tops if you were outside a very tight delivery zone and the delivery person was directly employed through the restaurant so they made a decent wage for a restaurant gig. Over seas I'd constantly see McDonald scooters zipping around Dubai and Tokyo so it's possible to do delivery even when the person doesn't bring their own car.
Door dash does it's best to hide how far a place is from you but happily increase the fees so you can get a luke warm sandwich and cold fries from the restaurant across town instead of the one a few blocks away with the same name that isn't currently delivering.
During a pandemic where everyone was basically forced inside these companies were barely profitable so it's not even a business model that really works. Door Dash did their best to race to an IPO before the had the rug pulled under them like We work.
I'd rather have the middleman die out and individual restaurants go back to offering delivery.
With how ridiculous the fees are Id prefer this personally. Delivery once upon a time was free for pizza or a few dollars tops if you were outside a very tight delivery zone and the delivery person was directly employed through the restaurant so they made a decent wage for a restaurant gig. Over seas I'd constantly see McDonald scooters zipping around Dubai and Tokyo so it's possible to do delivery even when the person doesn't bring their own car.
Door dash does it's best to hide how far a place is from you but happily increase the fees so you can get a luke warm sandwich and cold fries from the restaurant across town instead of the one a few blocks away with the same name that isn't currently delivering.
During a pandemic where everyone was basically forced inside these companies were barely profitable so it's not even a business model that really works. Door Dash did their best to race to an IPO before the had the rug pulled under them like We work.
I'd rather have the middleman die out and individual restaurants go back to offering delivery.
Probably the best way to solve this is to make it transparent to the customer how much they are paying to the restaurant and how much they are paying to the delivery service.
Leave it to SF to try to regulate a luxury like individual food delivery. An individual has to go and wait on your specific order at a restaurant and take it to your door, that's less efficient than a normal pizza delivery. It's no wonder they charge a lot for this.
DoorDash and others already pad food prices in addition to service fees. This will just make them add $3 to the itemized cost of a pizza while lowering the delivery fee, fixing nothing.
Actually I think restaurants were doing that in some cases to make up for the cut Doordash was taking from them, so now instead the cost should be reflected in the fees to user (theoretically)
One thing that the San Francisco cap will do is greatly benefit those who are disabled or otherwise unable to pick up. There is a large segment of the population that simply cannot do what I do and go pick it up. (See my anecdote below.) They're house-bound or elderly or disabled or really just have no practical way to get food without delivery. And "services" like DoorDash and UberEats and GrubHub all affect those people in pretty profound ways, and this puts a disproportionate burden on that cohort of customers out there. The rest of us can save money by taking different actions, but for those who rely on delivery for food, they're just shit outta luck.
And for those people--and even the rest of us!!--the fees are getting out of control. Like, I'll routinely order $40 worth of pizza or sushi and somehow my total is $63 not including a tip. Fees of more than 50% for a delivery are just bonkers and unacceptable. This is easily verifiable by just switching the same order from Delivery to Pick Up, if anyone is interested.
In an attempt to "fix" this, I signed up for the Door Pass subscription or whatever it's called, and instead of making me feel better about ordering, it felt like the "miscellaneous fees" went up to compensate for the delivery fees that were allegedly gone. I felt like maybe I was saving like 5%, but 5% of $63 is only $3 so I'm still paying $60 for $40 of food... That's still bonkers.
I didn't collect any data on this, to be totally honest, but I felt like I was getting ripped off every time I ordered food. After about 2 months I decided to cancel it, and the entire experience of using DoorDash was so traumatic that I wound up just choosing Pick Up every time and then going to pick it up from the restaurant. It was often faster than delivery, and definitely cheaper.. And then I realized that I was still supporting a company that had [what appeared to me to be] scummy practices, so I just stopped using DoorDash altogether.
Now I just go to the company's websites, if they have one, and I use that to order. Most of them allow pickup directly without using something like DoorDash.
(Note: I don't mean to pick on DoorDash specifically, because all of the delivery sites do the same thing, but this article is specifically about DoorDash, so I'm relating my experience with that.)
And for those people--and even the rest of us!!--the fees are getting out of control. Like, I'll routinely order $40 worth of pizza or sushi and somehow my total is $63 not including a tip. Fees of more than 50% for a delivery are just bonkers and unacceptable. This is easily verifiable by just switching the same order from Delivery to Pick Up, if anyone is interested.
In an attempt to "fix" this, I signed up for the Door Pass subscription or whatever it's called, and instead of making me feel better about ordering, it felt like the "miscellaneous fees" went up to compensate for the delivery fees that were allegedly gone. I felt like maybe I was saving like 5%, but 5% of $63 is only $3 so I'm still paying $60 for $40 of food... That's still bonkers.
I didn't collect any data on this, to be totally honest, but I felt like I was getting ripped off every time I ordered food. After about 2 months I decided to cancel it, and the entire experience of using DoorDash was so traumatic that I wound up just choosing Pick Up every time and then going to pick it up from the restaurant. It was often faster than delivery, and definitely cheaper.. And then I realized that I was still supporting a company that had [what appeared to me to be] scummy practices, so I just stopped using DoorDash altogether.
Now I just go to the company's websites, if they have one, and I use that to order. Most of them allow pickup directly without using something like DoorDash.
(Note: I don't mean to pick on DoorDash specifically, because all of the delivery sites do the same thing, but this article is specifically about DoorDash, so I'm relating my experience with that.)
> Fees of more than 50% for a delivery are just bonkers and unacceptable.
Yet you “routinely order” and give them the signal that pricing is indeed okay.
Yet you “routinely order” and give them the signal that pricing is indeed okay.
I feel like this comment is an attack on me and I'm not really sure why that is.
I routinely order _dinner_. When I first started using sites like DoorDash, the fees didn't seem to be as high as they are now. When the fees got to be so exorbitant, I started picking up instead. I definitely mentioned this in my post, and I think switching from delivery to pickup actually gives the signal that this is NOT okay.
Am I in the wrong here?
I routinely order _dinner_. When I first started using sites like DoorDash, the fees didn't seem to be as high as they are now. When the fees got to be so exorbitant, I started picking up instead. I definitely mentioned this in my post, and I think switching from delivery to pickup actually gives the signal that this is NOT okay.
Am I in the wrong here?
It’s not an attack on you. I don’t know you, what would be the reason to “attack you”? But hey, sorry if I offended you in any way! You are not in the wrong!
Last time I ordered something from Takeaway.com the restaurant put in a flier advertising their own app.
Everyone hates these fees.
Everyone hates these fees.
You seem to be making the assumption that since the fees are high, companies like doordash are making huge profits at the expense of the consumer, and that lowering the fees will just lower their profits. I don't think that is the case.
The reality is that it is pretty expensive to hire a person to drive to a restaurant, wait for your food, and then hand deliver it. Regulation that caps fees isn't going to magically make that process cheaper, it just means that they will either have to introduce new hidden fees to be profitable, or will have to stop offering delivery.
The reality is that it is pretty expensive to hire a person to drive to a restaurant, wait for your food, and then hand deliver it. Regulation that caps fees isn't going to magically make that process cheaper, it just means that they will either have to introduce new hidden fees to be profitable, or will have to stop offering delivery.
I made no such assumptions. If you think I did make those assumptions, then either I have failed to communicate my position or you have misread my post.
Understanding the economics of the delivery ecosystem and thinking that those economics are not worth it to me personally are two completely different things. I think the fees are too high and more than I want to pay, so I no longer order delivery and instead go pick up. That's all it is.
Understanding the economics of the delivery ecosystem and thinking that those economics are not worth it to me personally are two completely different things. I think the fees are too high and more than I want to pay, so I no longer order delivery and instead go pick up. That's all it is.
You said that this will help disabled people. The only way this regulation will do that is if delivery companies actually lower their prices, which I don't think they can actually do since paying a driver to deliver food is expensive. Instead I think they will just stop offering delivery, which is objectively worse for disabled people.
Well, there are a few things to tease out here here.
The first is that DoorDash and its ilk did not invent food delivery. Delivery services have been around for decades, if not centuries, and San Francisco (or any other major city like this) never felt the need to cap fees until recently. There's probably a reason for that, which is something along the lines of "the fees are rising faster and higher than is reasonable." Cash grabs, potentially? I don't know what it was, but something changed enough for a municipality to get involved. Which begs the question of whether the assertion that they cannot lower prices is true or not. Maybe it is, maybe it isn't.
The second is that your statement "paying a driver to deliver food is expensive" starts with the premise that delivering food is expensive. That's not necessarily a true statement. It certainly costs money, but "expensive" is a tricky thing to define at this level. To me, the real question is whether DoorDash's business model makes it expensive to deliver food, and that is almost certainly the case. There are plenty of restaurants and businesses that rely 100% on delivery that don't charge the exorbitant fees that DoorDash does -- restaurants and businesses, I might add, that are profitable and not VC-backed like DoorDash is. My brother owns a Dominos pizza franchise, for example, which is probably 90% deliveries. They have dedicated drivers. That's a completely different business model from DoorDash, which is a fleet of drivers that will pickup/deliver from any restaurant.
Now, does a driver at Dominos make a lot of money? No, not at all. But for Dominos it's profitable enough that almost all of their food is delivered, with a small percentage at pick-up. The same thing goes for most of the other big pizza chains, not to mention the thousands of Chinese and other Asian restaurants that rely heavily on delivery/takeout for their income. Whereas DoorDash has much, much larger overhead for drivers than a Dominos franchise does, and so its fees must be higher. That's fine and that's true, but just because it's expensive for DoorDash to deliver food does not mean that food delivery in general is prohibitively expensive.
The third is your suggestion that this will lead to people stopping delivery. That may be true for restaurants that don't deliver very much at all, or that didn't deliver pre-COVID and now they do out of necessity. But there are enough restaurants that were successful at delivery before DoorDash showed up and that will continue to be successful after DoorDash is long gone, and those delivery fees won't be dynamic and (often) through the roof like DoorDash's. I'm just not sure I buy the premise of this prediction.
My last thing is that I really don't care that much about DoorDash, and the intent of my original comment was two-fold: 1) to bring awareness that disabled people (et al) can be and are disproportionately burdened by the rapidly rising delivery fees which this SF cap will stop, and 2) to describe my rationale for no longer taking delivery via apps like DoorDash.
Are there side effects to this cap? Absolutely. Will it stop some restaurants from offering delivery? Almost certainly! Will delivery go away for good? I seriously doubt it.
Thanks for the discussion. I enjoyed it. Have a great week.
The first is that DoorDash and its ilk did not invent food delivery. Delivery services have been around for decades, if not centuries, and San Francisco (or any other major city like this) never felt the need to cap fees until recently. There's probably a reason for that, which is something along the lines of "the fees are rising faster and higher than is reasonable." Cash grabs, potentially? I don't know what it was, but something changed enough for a municipality to get involved. Which begs the question of whether the assertion that they cannot lower prices is true or not. Maybe it is, maybe it isn't.
The second is that your statement "paying a driver to deliver food is expensive" starts with the premise that delivering food is expensive. That's not necessarily a true statement. It certainly costs money, but "expensive" is a tricky thing to define at this level. To me, the real question is whether DoorDash's business model makes it expensive to deliver food, and that is almost certainly the case. There are plenty of restaurants and businesses that rely 100% on delivery that don't charge the exorbitant fees that DoorDash does -- restaurants and businesses, I might add, that are profitable and not VC-backed like DoorDash is. My brother owns a Dominos pizza franchise, for example, which is probably 90% deliveries. They have dedicated drivers. That's a completely different business model from DoorDash, which is a fleet of drivers that will pickup/deliver from any restaurant.
Now, does a driver at Dominos make a lot of money? No, not at all. But for Dominos it's profitable enough that almost all of their food is delivered, with a small percentage at pick-up. The same thing goes for most of the other big pizza chains, not to mention the thousands of Chinese and other Asian restaurants that rely heavily on delivery/takeout for their income. Whereas DoorDash has much, much larger overhead for drivers than a Dominos franchise does, and so its fees must be higher. That's fine and that's true, but just because it's expensive for DoorDash to deliver food does not mean that food delivery in general is prohibitively expensive.
The third is your suggestion that this will lead to people stopping delivery. That may be true for restaurants that don't deliver very much at all, or that didn't deliver pre-COVID and now they do out of necessity. But there are enough restaurants that were successful at delivery before DoorDash showed up and that will continue to be successful after DoorDash is long gone, and those delivery fees won't be dynamic and (often) through the roof like DoorDash's. I'm just not sure I buy the premise of this prediction.
My last thing is that I really don't care that much about DoorDash, and the intent of my original comment was two-fold: 1) to bring awareness that disabled people (et al) can be and are disproportionately burdened by the rapidly rising delivery fees which this SF cap will stop, and 2) to describe my rationale for no longer taking delivery via apps like DoorDash.
Are there side effects to this cap? Absolutely. Will it stop some restaurants from offering delivery? Almost certainly! Will delivery go away for good? I seriously doubt it.
Thanks for the discussion. I enjoyed it. Have a great week.
> Fees of more than 50% for a delivery are just bonkers and unacceptable
Door dash is very ineffective since the delivery persons pick up one order per restaurant. There is no scale like an old good pizza place. There is no wonder it is expensive.
Door dash is very ineffective since the delivery persons pick up one order per restaurant. There is no scale like an old good pizza place. There is no wonder it is expensive.
I totally agree. But for me, the expense is generally not worth it, so I've switched to pickup.
> There is a large segment of the population that simply cannot do what I do and go pick it up. (See my anecdote below.) They're house-bound or elderly or disabled or really just have no practical way to get food without delivery.
how big is this segment?
how big is this segment?
I don't know the numbers off the top of my head. I make no guarantees as to the accuracy of this, but according to this article [1], there are approximately 4 million house-bound Americans. This is effectively the lower-bound of the people who would almost certainly have to order delivery in order to eat food from a restaurant. Since they are house-bound, they literally cannot go pick up their food. There are other non-housebound people that would also rely on delivery for restaurant food, such as those without cars or those that are sick or (in the age of COVID) quarantining.
I'm not saying that DoorDash needs to change their model or anything to support these people, I'm just pointing out that while the rest of us have choices when it comes to how to get food from a restaurant, this cohort do not have much of a choice at all and therefore the fees from companies like DoorDash affect them quite heavily. It's effectively a housebound tax.
[1] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2014....
I'm not saying that DoorDash needs to change their model or anything to support these people, I'm just pointing out that while the rest of us have choices when it comes to how to get food from a restaurant, this cohort do not have much of a choice at all and therefore the fees from companies like DoorDash affect them quite heavily. It's effectively a housebound tax.
[1] https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2014....
The real question is how did these people survive until doordash came to exist.
If doordash became a public service entity you have bigger problems than fees...
If doordash became a public service entity you have bigger problems than fees...
I'm pretty sure you're not suggesting that DoorDash, et al, invented the food delivery industry out of whole cloth...
The point wasn't that delivery fees exist, but that they seem to be increasing to the point where a municipal government felt the need to step in and do something about it. For those who are housebound or otherwise unable to pick up food from restaurants on their own, these increased fees are a high burden that is inescapable. Granted, they could simply not order food, but that then puts a different kind of burden (i.e., quality of life) on those folks.
I'm not suggesting DoorDash, et al, need to change their model, but merely pointing out that this burden affects a certain segment of the population differently than the rest.
The point wasn't that delivery fees exist, but that they seem to be increasing to the point where a municipal government felt the need to step in and do something about it. For those who are housebound or otherwise unable to pick up food from restaurants on their own, these increased fees are a high burden that is inescapable. Granted, they could simply not order food, but that then puts a different kind of burden (i.e., quality of life) on those folks.
I'm not suggesting DoorDash, et al, need to change their model, but merely pointing out that this burden affects a certain segment of the population differently than the rest.
If delivery fees for a particular service are too high, another service can undercut them. It's a pretty crowded space. If people want to pay exorbant amounts for delivery they should be able to make the informed choice to do so. Just because you don't like something, doesn't mean it should be regulated out of existence.
Regardless in this case all the delivery companies will do is adjust their pricing so it costs the same amount while lowering the "delivery fee". Or maybe just stop offering delivery in less profitable cases.