About those meal delivery service fees

Not long ago, my local paper editorialized about supposedly exorbitant fees charged by meal delivery services. With many people still using this option, its economics remains a lively topic. Here’s the letter to the editor I wrote: 

Your editorials endorse “protecting” restaurants by “clamping down” on third-party meal delivery fees which can range up to 30%. You call it “gouging.”

On a $17 meal, 30% would be five bucks. To have someone drive to a restaurant, pick it up, drive it to a home, and deliver it? Sounds like a bargain to me. 

I actually believe free market economics is a good thing. You mention at least three companies delivering meals. Are their profits exorbitant? In fact competition among them has been keeping fees down to where they’re earning little if anything! That’s the beauty of competition in a free market, giving consumers the lion’s share of the benefits from any economic activity. 

And nobody forces anyone to use these services. If they weren’t providing value commensurate with their fees, they’d get no takers. 

Meantime you also favor a $15 minimum hourly wage. How many meals can be delivered in an hour? Could drivers be paid $15 if the fee for delivering a modestly priced meal is capped at 15%, as you advocate? More likely these companies could not operate at all. A loss to them, as well as to their drivers, to restaurants, and to foodies. 

Government should step back and leave this issue to be sorted out by people’s own choices in a free market. 

6 Responses to “About those meal delivery service fees”

  1. Don Bronkema Says:

    Bug is fossil-fueled battery drain. IBM 400% upgrade in cell-density will help, natuspeke of solar, aeolian, tidal & gravity recharge. Kids in 2100 will ask, “Grandpa, what’s an energy shortage?” Others will ask for a decryption of climate-crisis, white deracination, jingoism, ethnism, prodigality, misogyny, gender-hate, classism, gunnicide, police butchery & Bible-worship. Post-phage mine-waste & gyre-purge, theyl wonder what pollution was. Religion, capitalism, oligarchy & science-fear will be bafflers. Conjure a seamless planet–all systems fedback & syntelled–personkind already on Mars, bound for the stars per spacetime compression. Why go? Post Libet & Koch, H. semper unsapiens is an indubitable machinoid, w/risible pretensions to individuation. Mind, will & self are 20-khz neural sweeper-wave phantoma: Hegel’s ding-an-sich hurled to oblivion. We go to obviate boredom & the madness of an originless kosmos. Mean species lifetime: 1.2 MY. This nonagenarian says: Enjoy!

  2. Matt Says:

    Prices are typically higher on the delivery app menus from what you’d pay at the actual location. Those higher prices are to make up for the exorbitant fee they charge restaurants for the service. Then there’s the “service fee” which is capped at 15%, the “delivery fee” which ranges by restaurant location and distance but averages around $2.99, and then there’s the “regulatory response fee” which is $1.50 that basically makes up for the amount they’re losing from the service fee cap. And don’t forget the tip, unless you want to leave the integrity of your meal to the disgruntled delivery person being forced to deliver meals on the side of the day job that doesn’t pay the bills. I agree the free market should sort it out, which is why I don’t participate in these services. It has less to do with the fees they’re charging the consumer, and more to do with the fees they charge the restaurants. Sure restaurants don’t HAVE to participate in the services, but it is also frustrating to watch these tech companies use their deep pockets and venture capital to get a foothold in a market (and essentially be able to take seemingly endless financial losses), where it puts restaurants at a real disadvantage to not participate in these services.

  3. rationaloptimist Says:

    Your words “endless financial losses” tell us something here. Who, exactly, is getting screwed?

  4. Don Bronkema Says:

    In a seamless, planetary, quant blockchain of closed thruputs, digital credit & virtual assets, the speculation of angels & ven-caps would collapse. Think zero waste–max efficiency of capital & non-thermal, post-industrial, 3-D informatic production & service. Read MIT Tek Review; revisit last 8 Econ Nobelists & Thomas Piketty. Kinderstuff.

  5. DAN FAREK Says:

    Grocery stores in this area provide home delivery of groceries. For this they charge a small fee of around $5. Larger orders are delivered free. When you consider the benefits, if one is ill or homebound this is a godsend..

  6. Don Bronkema Says:

    Few of this nonagenarian’s acquaintance [post Reagan, the Shrubs. Clinton & Trump] boast $5, so they carry food back by shank’s mare. 25 lbs per arm is brutal for us cadavers, but ensure fitness. Oblomovians die fat & early [viz. Goncharoff].

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