Pa. lawmakers look to take a bite out of food delivery fees paid by restaurants | Friday Morning Coffee
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(A scheduling note: We’ll be off Monday, July 5, in observance of the July 4 holiday. We’ll be back to business on Tuesday, July 6. See you all very soon.)
Good Friday Morning, Fellow Seekers.
If you were like a lot of hungry consumers during the pandemic, the chances are pretty good that you used DoorDash, GrubHub, or some other food delivery service to get a meal from your favorite restaurant delivered to your dining room table.
But while you rejoiced in the convenience, restaurant owners were grumbling about the mixed blessing of a service that helped them keep their doors open, even as they paid up to 30 percent in delivery fees per order, cutting deeply into their bottom line.
But, as our news partners at Pittsburgh City Paper report, state lawmakers are now getting involved, and hope to resolve through legislation, what market forces could not.
Legislation now before the state House would cap third-party food delivery app fees at 15 percent.
It also would ban “practices that delivery apps use to manipulate small businesses by requiring that a delivery app have an agreement with the restaurant prior to delivering food from that restaurant,” Democratic Reps. Sara Innamorato and Nick Pisciottano, both of Allegheny County, wrote in a memo seeking sponsors for their proposal.
“During the pandemic, food delivery services have multiplied and it is now common to have food from our favorite restaurants delivered in a contact-less delivery to our doorstep,” the two lawmakers wrote.
“While these services are convenient, fees charged by the delivery apps can be exorbitant and eat into the profits of locally-owned restaurants,” they continued. “While franchised restaurant chains can leverage their large footprint to drive down fees from delivery services, small restaurants do not have the same market power and can be charged processing fees … that decimate already-thin profit margins.”
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As City Paper reports, the bill can’t come soon enough for some Pittsburgh restaurateurs, who say they’ve been laboring under the weight of these delivery fees for too long.
“I don’t believe the government should regulate fees,” Mike Murphy, the owner of Carson Street Deli, told City Paper. “Having said that, I’m making an exception. Regulate the hell out of it, because they’ve hurt some people.”
Murphy told City Paper that delivery apps will change the placement of an establishment’s listing on the app, depending on the percentage of delivery fees the establishment is willing to pay. Establishments willing to pay higher fees are placed higher up, while those who pay lower fees can fall to second or third pages, City Paper reported.
Murphy told City Paper that he doesn’t mind where his deli is placed in search results, since he says customers will seek out his restaurant specifically on third-party apps. But he’s also managed to negotiate lower fees with the delivery apps, City Paper reported.
But not all business owners are quite so lucky, City Paper reports. And that’s where the legislative remedy comes into play.
“As we move closer to a post-pandemic economy, we should protect small business owners by guarding against unfair fees and defending their autonomy from unscrupulous tech companies,” Innamorato and Pisciottano wrote in their ‘Dear Colleague‘ memo.
The bill is now before the House Consumer Affairs Committee.
The Pennsylvania Capitol building. (Capital-Star photo by Sarah Anne Hughes)
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What Goes On
The docket is clear. Enjoy your long holiday weekend.
Gov. Tom Wolf has no public schedule today.
You Say It’s Your Birthday Dept
Best wishes go out this morning to reader Bobby Maggio who celebrates today. Congratulations.
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And now you’re up to date.
Originally published at www.penncapital-star.com,by John L. Micek