Oregon

Lockdown Orders Have Devastated Restaurants. Politicians Think Price Controls Might Save Them.

The Portland City Council has approved an emergency ordinance capping the fees delivery apps like DoorDash and Uber Eats can charge restaurants.

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Restaurants across the country have had their dining rooms shuttered or been forced to operate under restrictive, profit-crushing social distancing protocols. City politicians are trying to throw them a lifeline in the form of price controls on delivery apps.

On Wednesday, the Portland City Council voted unanimously to cap the fees third-party delivery apps like Uber Eats and DoorDash can charge restaurants to no more than 10 percent of an order. The emergency law, which goes into effect immediately, limits these apps to a 5 percent fee for meals that are ordered through the app but delivered by restaurant employees.

It also prohibits companies from reducing delivery workers' pay to cover lost fees.

"Local restaurants are a vital community asset that provide food and jobs and contribute to the culture of Portland," said Portland City Commissioner Chloe Eudaly, who sponsored the legislation alongside Mayor Ted Wheeler, in a press release. "This ordinance protects restaurants from price-gouging during a declared emergency while protecting workers from reductions to their compensation."

Portland is hardly the first city to adopt commission caps. San Francisco, Los Angeles, Washington, D.C., and New York City have all done so as well, although these cities have limited fees to 15 percent of an order. They come at a time when restaurants are unusually dependent on delivery orders.

The counties of Multnomah, Washington, and Clackamas, which collectively cover the city of Portland, remain in phase one of the state's reopening tiers.

That means restaurants are allowed to serve customers inside but only if they are able to keep six feet of distance between tables. The maximum number of people allowed in a restaurant is either 250 or one person per 35 square feet of floor space, whichever is less. On-site food and drink service has to stop at 10 p.m.

These guidelines really restrict how many customers are able to be served. "Most floor plans pre-COVID were designed for efficiency," Nick Zukin, owner of Mi Mero Mole in downtown Portland, told Reason back in June, explaining that the phase one guidelines meant he had to downsize from 60 to 20 seats in his restaurant. (Mi Mero Mole announced in late June that it was closing for good.)

Before COVID-19 hit, there were already simmering tensions between restaurants and these apps over the fees that they charged, which could be as much as 30 percent of the cost a dish.

Katy Connors of the Portland Independent Restaurant Association (PIRA), told OPB that those fees often erased businesses profit margins, but that they were willing to accept them because delivery apps were good advertising. Someone who ordered an unprofitable delivery meal might be more willing to patronize the restaurant in person, she said.

With restaurants being forced to operate at reduced capacity, and customers less willing to eat out in public, the promotional benefit of delivery apps is essentially erased. Portland's reservations were down about 80 percent from this time last year, according to data from the restaurant reservation app OpenTable.

In response, PIRA and the Asian Pacific American Network of Oregon pushed lawmakers to adopt a cap on delivery fees.

Delivery app companies have said in written testimony to the city council that the 10 percent fee they are allowed to charge customers doesn't cover their costs and will require them to increase prices for consumers, OregonLive reports. They warn that the knock-on effect could be that fewer people will end up ordering from restaurants.

It's also hard to argue that restaurants are being gouged by delivery apps that are themselves losing money. Uber reported that Uber Eats lost over $300 million in the first quarter of 2020. Grubhub lost $33 million in the first quarter of 2020, despite seeing its revenues grow.

"Although delivery apps have proved quite popular, no one has devised a decent business model for them. At the moment, they're kept afloat thanks to lavish subsidies from investors," wrote Bloomberg's editorial board in late May. "That means consumers get deliveries for much less than they'd otherwise have to pay, and restaurants, far from being scammed, are in fact paying significantly below what the market would demand absent such support."

The fact that restaurants don't feel like they can just walk away from their relationship with delivery apps suggests that they do in fact still derive benefits from them.

That doesn't mean restaurants aren't struggling right now. The industry is in crisis, with some analysts estimating that up to 20 percent of eateries will never reopen.

But price controls are always a blunt tool. They could end up tanking delivery apps that were losing money even during much rosier economic times. A more constructive approach would be for politicians to lift lockdown orders so that restaurants can reopen the actually profitable portions of their business.

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  1. Lift the lockdown orders? Why do you hate grandma?

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    2. I love grandma, but I am in her will, and she is LOADED!

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    3. Grandma WANTS to be taken out to dine at a nice restaurant. She is FURIOUS over being denied that pleasure. It is the idioit mayor of Portland who hates Grandma, and anyone else that wants to be left to make their own decistions about when to go [potty, when and where and what to eat, and how many people can sit in the same room without everyone dying tomorrow morning because covid.

      Portland is a disgusting enough city without saddling it with that out of control nannie meddling.

    4. Because she took me out of the will.

  2. Of course. It’s always some type of control.

    1. And of course, you show up in a thread talking about food.

      1. At least he isn’t threatening to point the government at us if we don’t do what he wants.

        That’s progress.

    2. Actually, there IS always some kind of control. Markets do it every day. The stupidity of THESE controls other than that once again, no government official has any knowledge of the industry they are attempting to regulate is that such regulations actually work against consumers by taking away incentives for new startups that may be more efficient and offer competition and opportunities for employment. Consumers are remarkably adept at telling companies that their prices are too high by shifting their business.

      1. Well, I was responding to the seemingly kneejerk reaction of those in power to any problem or crisis – impose more control over people.

        1. You were responding to hunger you piece of garbage

        2. “Well, I was responding to the seemingly kneejerk reaction of those in power to any problem or crisis – impose more control over people.”

          When the only tool one has is a hammer, every problem begins to look like a nail.

      2. Maybe I’m lucky, I live pretty close to a few restaurants, and I look up Door Dash and it is three bucks more for every entree plus a five dollar delivery fee plus a tip and I always end up thinking I should just pick it up for sixty as opposed to getting it delivered for eighty five. Why would the government be involved with people deciding they would rather pay the extra twenty five dollars?

  3. Let’s all remember if you want less of something, tax it or put a price ceiling on it.

    Restaurants and consumers seem to need delivery services more than ever today. Why are these cities going out of their way to reduce supply? It’s almost as if these politicians don’t understand economics or how people respond to incentives.

    1. It makes sense only to people that think only on the consumption side and never where and how the supply is made. For these people, stuff just appears, so both market and regulation forces have no effect on supply.

    2. you have it. Politicians know naught of economics nor of real life. NONE of them have ever worked an honest day’s labour for an honest day’s pay. They occupy a Looking Glass Universe. Someone ought to light a gopher gasser and chuck it down that rabbit hole. But make sure the current occupants are forewarned.. except possibly the Queen She needs to learn her rightful place. Words mean what they mean whether that’s what SHE wants them to mean or not. She IS a politician with that sort of trash rolling about whithin her otherwise empty cranium. But Portland’s politicans? Yes, rund them all up ,entice them down the Rabbit Hole, and “gift” them with an abundance of gopher gassers…..

    3. My favorite part in all of this is that the people who who bitch about the greed in corporate America have no fucking clue that their Door Dash meal is being subsidized by those same “greedy” Wall Street types who are investing heavy in a business that’s losing money hand over fist, and with no guarantee of a return. Without those horrible people investing resources in to these unproven ventures, those smug west coast liberals’ dinner is 30% more expensive.

  4. If we really want to help restaurants, we should implement two of Charles Koch’s favorite policies: (a) unlimited, unrestricted immigration, and (b) no minimum wage.

    This would really help restaurants reduce their expenses by letting them hire dishwashers willing to work 12 hour days for like $1 / hour.

    #Libertarianism101

    1. You seriously have no idea how markets work, do you? Do you wake up every afternoon being terrified at making clothing choices for the day without government interference or is mom still handling the heavy lifting for you?

      Christ, get a job that amounts to more than gas money for your moped before you comment further.

      1. It’s a parody account.

      2. fucking loved my moped. Puch

        1. they make a fine one. Parts a bit on the scarce side these days, and also a tad dear as well.

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    2. This would really help restaurants reduce their expenses by letting them hire dishwashers willing to work 12 hour days for like $1 / hour.

      Well aren’t you generous with other people’s money. The minimum wage in Mexico is $5 a day!

  5. “The Portland City Council has approved an emergency ordinance capping the fees delivery apps like DoorDash and Uber Eats can charge restaurants.”

    Price control is important.
    Control over food is more important.
    Control over the masses is most important.
    God bless the control freaks in power who have the foresight and prudence to continue to micromanage our meaningless lives.

  6. They have a 5-year plan!
    And they are stupid enough to believe they are smarter than Gosplan, or un-educated enough to not know what that is.

  7. The problem is that Door Dash, etc, were taking more money than the restaurant made in profits.

    There’s a reason that delivery has only been for high profit margin food like pizza…

    1. Most restaurants list higher menu prices on the apps than they do in house. A restaurant near me is about 30% higher if you order from GrubHub than if you call them directly and order

    2. So they were making more money than the restaurant, that is irrelevant.
      The real issue is that neither the restaurant nor the delivery system is making money. The logical choice is to shut down and put your efforts elsewhere.
      When I worked there, Gulfstream made less profit on an airplane that Rolls-Royce made on the two engines that powered it. But both made money.

  8. The maximum number of people allowed in a restaurant is either 250 or one person per 35 square feet of floor space, whichever is less. On-site food and drink service has to stop at 10 p.m.

    I’ll bite. Show me The Science.

    1. I can show you The Religion though.
      If you participate in the ritual of staying 6 feet away from people and don your mask, maybe COVID-19 will show you mercy.

      1. At least in this life.

    2. They’re still going at it with curfews? They’ve never explained why limiting hours is going to reduce contagion.

      1. In theory, people might get more sleep and b ed healthier. In reality, they drink to numb the painful monotony of existence.

        1. I’ll drink to that.

        2. If the same number of customers spend the same amount of time in a given store each day, but the store is open for fewer hours, the average density of customers in the store increases proportionally to the decrease in business hours.

          COVID prevention by increasing customer density? Why, that’s just crazy enough to make things worse!

      2. Yeah I don’t understand the whole curfew thing either.

        I’m thinking that one reason might be that the laws they are using to enforce these ‘lockdown’ provisions are broad enough to permit curfews, so it’s like, well, they can do it so why not.

        1. “Yeah I don’t understand”

          Finally you’re honest.

    3. One data point:

      https://www.sciencenews.org/article/coronavirus-covid-19-why-6-feet-may-not-be-enough-social-distance

      The six feet rule is just a “rule of thumb”, mainly. Droplets and aerosols travel varying distances and depend on a lot of factors like humidity, wind, etc.

      1. What’s actually safe is unknown.

        At last, The Science! Obviously the guidance must be to quarantine everybody forever.

      2. Six feet is thought to be the average distance of droplet travel if the droplet is ejected during normal speech. Yelling, sneezing, or coughing very likely could propel them well beyond that.

        Aerosols can remain in the air for hours, and COVID is supposedly able to remain viable in the air (indoors) for about 2 hours also. Aerosols penetrate surgical or cloth masks easily. Trying to defend against them without respirators is pointless.

        The whole point of masks is supposed to be stopping the egress of droplets, which are thought to be the major mode of COVID transmission. The studies that supposedly demonstrate the effectiveness of masks often center on that point. “Masks can stop 65% of droplets,” which they combine with “Most COVID transmission happens via droplets” to conclude that “Masks can prevent 65% of COVID transmission.”

        I have no doubt that masks could stop a lot of the droplets. It’s just that if there are pathogens within those droplets, they keep right on existing even if the droplet can’t get through the mask. The droplet, though, does _not_ keep existing… it evaporates within a few seconds. All it takes is a little air current (like the person breathing, as people sometimes do) and the formerly droplet-borne pathogen is now an aerosol. Those that get pulled back into the lung will either have another chance at a droplet-borne ejection, or perhaps they’ll infect another cell of the host, which creates even more virions to be ejected via droplets.

        The other possibility is that the virus will be carried by exhalation or talking (which, of course, is always done on exhalation) through the mask, and into the air. This will happen continuously for as long as the virus shedding individual is there, and unlike droplets, these aerosol virions can travel anywhere in the room, or into other rooms, carried by ventilation systems.

        The more people that wear masks, and the more effective those masks are at catching droplets, the more the droplets will be converted to aerosols, which remain in the air much longer and are not stopped by any cloth or surgical mask.

        None of the studies I’ve looked at or read about have credibly addressed the effect of masks on infection rates in a purely empirical sense. There are some that attempt to do that with regard to infection rates before and after mask orders, but that does not truly isolate mask wearing as the sole experimental variable. Infection rates change over time without changes in government decrees, and even before mask rules went into effect, many people choose to use them on their own. After the rules went into effect, some still choose not to comply.

        If you can’t isolate the variable, you can’t know if that’s the thing causing the change.

        I also have not seen anyone address what happens to the virions that may be within a droplet after it falls to the floor within the allotted six feet.

        If aerosols are, or become, the dominant mode, or even a significant mode, of transmission of COVID transmission, masks are more harmful than effective. They make people think they’re protecting themselves, which makes them less likely to do things that actually can help, and they make people touch their face a lot more, bringing those virions right up into the airstream going into the lungs. Yeah, they’re on the other side of the mask, initially, but the mask offers no resistance at all to the passage of the virus.

    4. There IS no sicence. You are expressly forbidden even asking about that. It is more a religion.. WE are the all wise all powerful ones, and must be obeyed. We know.. and YO do not. Take it on blind faith. Because WE say so. End of story. Shut up and sit down.

      just in case you missed it, sarc/ comes right about here

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  9. one bad law to “fix” another bad law, they never learn.

    that said restaurants can tell Uber and others to take a hike

  10. If these restaurant owners live in the city, odds are good they voted for the politicians “masterminding” this ingenious scheme.

    Just sayin’.

  11. Koreans get everything delivered to them. They could even order toilet paper. Some guy on a motorcycle will risk small children’s lives as they speed through the road to deliver Korean Chinese food in a metal box.

    At the end of the day it’s about cost of business in general. And these deliver companies in America can’t hire some Mexicans on the street off the books.

    1. Funny that Koreans also aced the premiere showing of coronavirus quarantine … sorry for being so racist there, comrades …

      That was sarcasm if facts speak for themselves.

  12. ….but, but, but wage and price controls worked so well for Nixon in 1971! (sarc)
    https://www.washingtonexaminer.com/remembering-nixons-wage-and-price-controls
    Several lessons from Nixon’s folly remain highly relevant today.

    Yet politicians never learn, and each generation of politicos think they have the answer, the same old “new” answer.

  13. Restaurant profit margins tend to be very thin. The only way both the delivery app service and the restaurants can make a profit at the same time is to pass the delivery costs on to the consumer.

    Will that reduce business? Probably, at least short term. But it’s the only way to make third party deliver services sustainable.

    1. Well that is until they can build a fleet of Roomba like drones to deliver food.

    2. Which is exactly what they do. Compare the app price of a menu item to the price in-house price for the same item. You are paying up to 30% more to order from the app

    3. which perfectly describes the FREE MARKET these nannies of Portland cannot tolerate.

      It is all driven by the CONSUMER. The guy who is so hungry he MUST have food, and is too lazy/incompetent/busy to stop, make sure he has something at home to prepare, and does so, and such a person then picks up his movil device, pecks a few squares on the screen, picks out what he wants, pays for it, then selects one of the opetionis as to how to GET it into his hungry hands.
      He may hop on his Portland Fixie and ride there to snag it, and put it in his panniers to take back to wherever he will eat it. He could hop in his car, do the same. He could ask his friend to drop by and pick it up and bring it to his own house to share, the tramsport being his friiend’s contribution to the nosebag. He could pay the resturant extra to delive,r he could hire the dash or eats, or a bicyclie courier.. ALL those optioins are his. And only HE can make the final decision on each of those things. HE will determine at what point Uber Eats charges to much and do something else.
      The Uber driver needs to decide whether he will take that turn, based on where he is, where the restaurant is, where the food is to go. He must weighhis time, cost per mile IN PORTLAND TRAFFIC< against whatever else he could do with his time/fuel/car.

      That is a free market.
      WHen the consumer is no longer willing to pay the asked for fee to deliver, consumer will do something else. That is NOT for government to determine.

    4. Dang forbid that people dare be prosperous enough to.afford an option for hope of home delivery.

      The more delivery drivers on the road, the fewer restaurant goers.

      The two-party idea that more drivers shall be on the road if home delivery ever takes off has now become inevitable.

      1. And I forgot to mention promos where anyone can get the food delivered for free or with a discount off typical prices.

        Your council was really this short-sighted???

  14. if one politician would get sick or lose a business and get bankrupted his opinion might matter

    1. Why in hell would you expect a (socialist) politician to even consider working for wages or running a business? If you do that, the results are obvious.

  15. Did these city council members walk away from their high-paying jobs running restaurants to work for the city? Or is it possible that these people don’t know one fucking thing about running a business and yet are so presumptuous as to tell other people how to run their businesses? Christ, these people are lunatics. What kind of arrogant egotistical know-it-all shithead can possibly believe they know better than everybody else how to do their jobs? Can’t we just lock the deranged fuckers up for their own good? Obviously they are deranged.

  16. One can always count on politicians to take a bad situation and make it worse.

  17. Can’t fix stupid

  18. DEFINITION:

    FASCISM:

    Government control of private means of production

    Here the gummit of the city of Portland are stepping in and taking control over the restaurants, the delivery apps, vehicles, individual drivers, and CONTROLLING what will take place.

    Proof beyond question that Portland are a fascist city.

    I’ve known that for at least a decade or more. Now it is plain for all to see.

    1. It also illustrates that the concept of fascism as right-wing is bunk. There’s nothing right-wing about Portland. In reality, Marxism and fascism can mix together nicely, as they are both essentially the same thing with slight differences in implementation.

      Under fascism, the government regulates and taxes private businesses and industries to the point that there’s no real difference between that and having them nationalized, as the Marxists would do.

      Under fascism, the leaders of industry get seats at the government table, effectively becoming part of the government. In Marxism, the leaders of industry are members of the government appointed to run that particular industry. It’s a distinction without a difference.

      In fascism, the state is everything. In Marxism, the “ongoing revolution” is everything, which is, in practice, exactly equal to the state.

      As you go down the list, you see that every single trait of one is a trait of the other. They both have their predetermined bad guys, be they capitalists/bourgeoisie or Jews; they both demand that any art serve the interests of the state/revolution; they both exist only with massive deception, censorship, and propaganda; they both involve secret police and a police state; they both ignore the concept of individual rights and value people only as cogs in a machine.

      This idea that somehow fascism is the polar opposite of Marxism is absurd. They’re peas in a pod. Libertarianism is about as far from both as any political philosophy can be. I’d say anarchism would be further, except that all the putative anarchists I’ve known were actually Marxists who wanted to skip the process and get right to the end point of Marxist theory, where the state withers away and true communism is achieved. The idea that this could ever happen is so ridiculous that I suppose it makes no difference how people pretend it could come about.

  19. Follow the money. These council members are supporting “friendly” businesses. Same type of thing happened in corrupt Austin Texas when they banned Uber to protect the Democrat taxi companies.

  20. “On-site food and drink service has to stop at 10 p.m.”

    Dear God!
    That damned virus has learned to tell time!
    One more mutation and we will have to allow it to vote.

    1. Made me chuckle

  21. I remember price controls back in the Nixon years. Long gas lines if you could even get it.

    Price controls create artificial shortages of goods and services. Vendors will quickly run out of items with price controls. Restaurants will close if they can’t make enough to pay their expenses and a small profit.

    1. Earn a small profit.

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    They shouldn’t be allowed to pass any regulation without first serving a thousand hours working there.

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