The government's up in delivery’s business

The apps say regulators don't get it.

photo via Unsplash

In a letter sent to the CEOs of DoorDash and Uber last week, U.S. Senators Elizabeth Warren, Bob Casey, and Ben Ray Lujan assert that restaurant delivery is not a luxury. The country’s largest delivery apps, profiting from the business of delivering food, are hurting American consumers. It’s the latest move from top Democrats to kill so-called “junk fees,” the often unexpected charges that show up on a bill just before it’s time to pay. 

The letter asks highly specific questions about fees the companies charge customers. What are they? What costs do they say they cover? What costs do they actually cover? And how much of those fees go to delivery workers versus executive compensation? It requests answers by May 15.

Obviously, the platforms aren’t happy about this, and dispute the government’s characterization of the fees. 

"The fees for orders on Uber Eats help pay delivery people and cover platform costs…so that orders can arrive reliably. Fees are always presented to consumers before checkout, and merchants are in full control of their prices on the app,” an Uber spokesperson told me over email today. 

A DoorDash spokesperson recently told Restaurant Business that there is no connection between the fees and executive compensation. Further, “facts matter,” a spokesperson wrote in an emailed statement to Expedite today. Also in the statement, DoorDash said the Senators’ letter “completely misrepresents how DoorDash operates., and demonstrates a disappointing misunderstanding of the important economic value our platform provides for millions of workers, small businesses, and consumers.”

It’s the same sort of response we’ve heard from the delivery companies before as they address previous government intervention including minimum wage requirements and commission caps in certain jurisdictions. For example: In a statement to Vox addressing delivery minimum wages recently imposed in New York City and Seattle, Uber said there are “consequences to bad regulations and we made these consequences clear in repeated testimony that both cities chose to disregard.” 

And in a blog post explaining changes to how it operates in New York due to the mandated wage, DoorDash said, “The City offered two options — both deeply flawed — for how platforms like DoorDash could meet its new minimum pay rules.” 

Is a too-simplistic understanding of food delivery the problem here?

Here’s the letter’s logic: