Food Delivery Changes

The Lempert Report
February 28, 2023

When we talk about food delivery, what's happening is there are a lot of cities who are now changing their caps during the pandemic, they started capping delivery services at 15%. They're now taking those off. There's complaints coming from restaurants and consumers. Some say that they're gonna go back up as high as 30%, and there's actually the delivery companies themselves that are complaining and talking about the tens of millions of dollars that they have lost because of these caps. What is going on with food delivery? 

Sally: Yes, Phil. Well, you know, back when the shutdown happened, and we were right at the beginning of the pandemic, these caps were actually put in place in some cities to really help these restaurants that were struggling and had lost so much business. So, putting that cap on the commission helped them stay in business. But now cities like San Francisco, New York, Clark County in Las Vegas, they are now dropping those commission caps. So now the Uber Eats and DoorDash and GrubHub, all these companies, they can go back up. Now, they are saying that they need these big commissions on the restaurants because, if they didn't have them, they would have to hike up the delivery fees for customers. So that is the argument coming from the delivery side. From the restaurant side is a different story. 

Phil: Yeah, and I've gotta tell you, I think that the whole food delivery situation has got to change, quickly. And I think otherwise it's gonna go the way of the Dodo bird. Food delivery has been a convenience, obviously, in necessity during the pandemic. But, I don't think that food delivery works outside of major metropolitan areas like New York, like Chicago, where there's high concentrations of it. And frankly, when I look at the disconnect between food delivery, not only from the economics, but as we've talked about before, food delivery delivery has none of the human emotionof food. And I think that's the biggest drawback that a lot of these food delivery services have. It's all about speed. It's all about doing as many deliveries as you can. And frankly, they don't really care about the food and connecting with the person who's ordering the food. And I think that's gotta change if food delivery is gonna survive. 

Sally: Yes. And you know, something else I've noticed, Phil, is that half the time when we order food to be delivered here in Nashville at our home, there's a mistake in the order. And the problem is that we can't talk directly to the restaurant, to get that resolved. It's on the delivery company. And so it really doesn't; it's very difficult to get it resolved and to get a refund or to get the right order. So there is a disconnect right here, I think also with the customer and the restaurant's relationship. 

Phil: Yeah. And I think it's gonna have to be fixed before, you know, it can proceed. And as we've talked about a dozen times in New York City alone, there's over 60,000 bike delivery services for either people, for either restaurants or supermarkets. And that's way too many. And again, a lot of these drivers are just complaining that they can't make money or the dangers. And also these companies keep on pushing them, so they're getting in traffic accidents, they're getting their bikes stolen. We need a different way. Maybe it's drones. I don't know. I don't think so. But who knows?