The big apple takes advantage of food delivery

The New York City City Council has had a lot to choose from with the Grubhub food delivery platform. During the pandemic, that mood seems to be spreading to reach the sector more broadly as market share has stabilized. Home to roughly 10% of the US market and a possible harbinger of local action elsewhere, the city’s attitude is very important.

The conflict heated up last week. On Thursday, the council said it passed five bills aimed at shifting some of the balance of power from food delivery platforms to “struggling family stores.” The bills include simple legislation such as providing restaurants’ direct phone numbers to diners and prohibiting platforms from charging restaurants for phone orders that do not result in transactions.

But they also include more controversial and probably more consistent rules. One, if put into effect as anticipated, would extend the temporary limits imposed on commissions that food delivery platforms can charge restaurants until at least mid-February 2022. Beyond what was decided last week , the city council says it is also scheduled to review a permanent commission cap bill this month.

Long-term limits sound ominous for food delivery companies, but the true extent of their effects is not fully understood. US market leader DoorDash, for example, has reported earnings on the basis of adjusted earnings before interest, taxes, depreciation and amortization for the past four quarters, virtually the entirety of the pandemic.

At the same time, the company said in an April blog post that commission caps have had a “tangible impact” on its business in terms of declining demand, as prices paid by customers have risen to recoup the fees. lost dollars.