Several city councilors and an aide to Mayor Walsh put delivery companies on notice today: Do more to help out restaurants and consumers by curbing fees during the pandemic or the city will impose fee caps as is being done in other cities.
An official with Grubhub - the only one of the four main delivery companies to agree to participate in a City Council hearing today - cautioned that if Boston wants a legal fight, it will get one, and besides, making the companies cap fees would actually increase consumer costs.
Several councilors accused the delivery companies - Grubhub, DoorDash, Postmates and Uber Eats - of essentially screwing restaurants that didn't do delivery before - restaurants the councilors said had had their knees knocked out by the closure of their dining rooms and are now losing money on deliveries made through the companies. They warned that without help on fees, restaurants might be forced out of business altogether by the fees.
"We're in a pandemic, we're in an economic recession," an angry Councilor Ed Flynn (South Boston, South End, Chinatown, Downtown) said. "I'm asking the delivery companies to be reasonable. They haven't been reasonable. They're not being a good neighbor," unlike locally owned restaurants whose owners are integral parts of their communities. He added, "When someone's down on their luck, down on the ground, you offer them a helping hand to get them back on their feet. ... You need to be a better neighbor."
Councilor Matt O'Malley (Jamaica Plain, West Roxbury) said that by capping fees, the companies would be helping restaurants - and he called on them to stop creating "ghost Web sites" for restaurants that don't have contracts with them to grab some of their business.
Kaitlyn Passafaro, director of policy of the Mayor's Office of Economic Development agreed that restaurants need a break from fees that threaten their ability to make money and so stay open. "This is unacceptable," she said.
John Schall, who owns the El Jefe Mexican restaurant in Harvard Square, and who was about to open one in the Little Building at Tremont and Boylston streets when the pandemic hit, said he is doing far more delivery business now, but he's losing money on deliveries due to delivery-company fees.
Schall pointed to a "support for super" program Grubhub ran last month - in which customers could get $10 off every order of at least $30 they made between 5 and 9 p.m. Sounds nice, but the restaurants were charged the $10 on top of their normal fees - which meant that on a typical order for him, he would only get 37% of his menu price, he said.
David Doyle, co-owner of three small restaurants in Jamaica Plain, said all had relied almost exclusively on in-restaurant diners before the current restrictions. After looking at the costs of orders with the delivery systems, he concluded it made little economic sense to sign up and so he's going to either have to figure out how do his own delivery or hope local people will continue to drop by the restaurants for pickup. "Why would I chose to have a relationship with Grubhub if it makes me no money?"
Amy Healy, director of public affairs at Grubhub, responded that the "30%" everybody keeps using as a figure for markup on restaurant deliveries doesn't mean the company is keeping all that money: Grubhub has bills to pay as well, for things from background checks on drivers and Google advertising to other marketing programs for restaurants. She said restaurants are typically charged about 10% of the order, consumers 20%.
She said that a cap would be "overreach" on the part of the city and said the company would not simply let its lawyers sit idly by. The company, she said, is not a public utility subject to regulation. She added it's not even a delivery service, because it connects restaurants, diners and independent-contractor drivers, rather than delivering the food itself.
Reducing fees would actually drive up costs because people would order less from restaurants and would mean drivers who now earn a living delivering meals would lose their jobs, she said, adding the company is hardly in the business of screwing restaurants - on whose survival the company depends. She said it recently made a $1.25-million contribution to the Boston-based Restaurant Strong Fund for restaurant workers, has pledged additional funds to support restaurants and, besides, lost money in the last quarter.
And nobody is forcing restaurants to sign up with Grubhub or its competitors - they can try to arrange alternatives or hire their own drivers - she said.
But Stephen Clark, vice president of government affairs at the Massachusetts Restaurant Association, said his members who don't have delivery contracts are particularly disturbed by the way the companies have taken to putting up faux sites that consumers find and then order through - sending drivers to pick up orders the restaurants did not know about and could not ask about such issues as allergies.
Healy agreed the practice is distasteful and said she'd be willing to to work with the association to figure out an alternative - but acknowledged that Grubhub now does it as well to keep up with its competitors.
"I think the alternative is not doing it because it's a duplicitous practice," O'Malley said, adding it particularly hurts restaurants owned by immigrants - and Boston has a lot of those - who may not even realize the services exist.
O'Malley asked Healy if the company is thinking of pulling out of New York City now that the city council there has passed an ordinance - which still requires the mayor's signature - to cap delivery fees at 15%.
Healy said the company is still considering its options there.O'Malley replied with a statement about the ordinance he is unlikely to ever use again: "If it's good enough for New York City ..."
The next step for the council's Committee on Small Business and Workforce Development is to hold at least one "working session" in which to draft a specific ordinance that could then go to the full city council for its vote.
Like the job UHub is doing? Consider a contribution. Thanks!
Ad:
Comments
This is actually
By SuperChingon
Fri, 05/15/2020 - 5:02pm
not a terrible idea... but I doubt it will ever happen due to the huge scope
The company, she said, is not
By Rob
Fri, 05/15/2020 - 4:41pm
If you're not providing the food or the service, then you're not essential. Shut down.
So slimy
By mg
Fri, 05/15/2020 - 5:22pm
Making fake websites is beyond the pale.
Another slimy practice - when a favorite restaurant stopped using GrubHub, it started listing them as "closed", when they are open and making their own deliveries.
Looks like the AG...
By Michael Kerpan
Fri, 05/15/2020 - 5:39pm
... should be looking into shutting these folks down for deceptive (and even fraudulent) practices.
also to disuade pickup
By anon (not verified)
Mon, 05/18/2020 - 9:08pm
I had to go to work one weekend and decided to get food literally 2 minutes away. I couldn't just call them with the order as they couldn't process the payment - Caviar or Grubhub for pickup and delivery. I already had a grubhub acct but they said the restaurant was closed - I had just spoken with them! I had to join Caviar to get food in the building next to mine but because I wasn't doing delivery, Grubhub tried to get me to pick a different restaurant. It has happened with other restaurants as well between services - listing as closed when they're really open. I didn't realize how shady it was until recently.
GrubHub soon to be UberEats
By anon (not verified)
Fri, 05/15/2020 - 5:40pm
Regulate. Before they consolidate.
GrubHub seemed like a good idea, but it raises the price of food with too much going to the company and not the driver/delivery person. I found it trivial to actually call the restaurant, order and go pick it up in the neighborhood. At least it's one small way to support the locally owned, non-franchise restaurants.
GubHub is in play. The investors and management will take home a fortune after the sale to UBER, leaving the driver and restaurant none the better.
O'Malley asked about that
By adamg
Fri, 05/15/2020 - 6:22pm
The answer was that the senior executive only knows what O'Malley knows, because she reads the papers (well, maybe these days the Web sites), too. O'Malley asked if it's true that if Uber Eats followed through, the resulting company would control 55% of the restaurant-delivery business, and she gave the same basic answer.
Failure of the Restaurant Association, Chamber of Commerce
By O-FISH-L
Fri, 05/15/2020 - 7:45pm
I agree that the delivery fees are outrageous but part of the prominence of GrubHub etc. is a failure of the Boston Chamber of Commerce, awash in money that could be used to create an app or the entire service (app, car and driver) for participating small restaurants at little or no cost to the restaurants. I don't think the MA Restaurant Association is as rich as the Chamber but the MRA could do more to facilitate a cooperative delivery service for all Boston restaurants, in all neighborhoods. The Chamber and MRA should be involved in these small-business boosting activities instead of politics.
Eh, no
By lbb
Mon, 05/18/2020 - 10:02am
You're missing a few key ingredients, such as talent and subject matter expertise. You need someone who understands both the problem and the technology. Without both you'll spend a lot of money and get garbage.
"I'm asking the delivery
By anon (not verified)
Fri, 05/15/2020 - 8:35pm
And if you don't want to, the government will point guns at you and force you to.
I just got finished reading (coincidentally) another article on these delivery companies and think they're pretty scummy. But they're not threatening to force anyone to do business with them. Way to go, government, for making me actually root for them in this fight, because you're actually worse.
Welcome, child
By Will LaTulippe
Fri, 05/15/2020 - 9:38pm
Speak truth to power.
"point guns" lol
By lbb
Mon, 05/18/2020 - 10:03am
You're running a fever, aren't you?
Gas shortage
By Stephen Bickerton Sr
Fri, 05/15/2020 - 9:14pm
For those old enough to remember the gas shortage.
In beacon hill on Cambridge st a gas station owner pulled the same Shit.
When things calmed down we remembered.
He closed down because people remembered his BS.
Lets see if this will produce the same results
I hope so
How about a government app
By Thomas Crowley (not verified)
Fri, 05/15/2020 - 10:54pm
Build an app that any restaurant can adopt. The fee is enough to cover the development and maintenance costs, and pay drivers a real wage, I'm going to throw $20 an hour out there. There are plenty of MIT geeks who are at home, wishing they could conceive the next SMOOT. Win, all student debt is wiped out, and you get free delivery for life.
I'm willing to bet most of
By anon (not verified)
Fri, 05/15/2020 - 11:19pm
I'm willing to bet most of GrubHub's customers during the stay at home advisory are the gainfully employed babies of the 90s whose happy faces appear on the Orange Line ads. Therefore, of course fees are going to go up and money will be had. Damn, didn't your Grandma teach you how to cook ?
or they're busier than ever
By anon (not verified)
Mon, 05/18/2020 - 9:17pm
trying to keep their jobs so they don't end up driving for Grubhub to avoid eviction. I have meetings all day now and still have to get work done. No time to get to the supermarkets during the week with the limited hours or when I do, dinner is 10 pm. Sometimes delivery means getting to eat a nutritious meal vs. crackers and cheese. Also those 90s babies you're whining about keep getting told that the restaurants need people to order food to keep them alive - people who are still working can do that but thought they were actually helping keep the restaurants alive, not lining the delivery services pockets at their expenses. MA won't recover post Covid without functioning restaurants and the people they attract to the area.
Can we get a public option?
By YIMBY (not verified)
Sat, 05/16/2020 - 11:38am
Can Boston create a public agency, or, perhaps more cleanly, a non-profit owned by the city, that would serve as an at-cost facilitator of online ordering? Reduce fees to both restaurants and consumers; keep money in the city; maybe create a few jobs. Plus, once it’s going, we could lease the tech to other cities to create their own versions. Net win for us, sorry to the shareholders of the companies.
Maybe call it “BuyBoston†“Bosawalla†“HubGrub.â€
(Ok, I need help with branding.)
It came up
By adamg
Sat, 05/16/2020 - 1:02pm
Kenzi Bok proposed a delivery co-op. The Massachusetts Restaurant Guy said he hadn't heard of such an idea, but he's open to anything that would help restaurants.
Puffery
By Shaka (not verified)
Sat, 05/16/2020 - 2:46pm
This is all puffery.
The reason no other company showed up is because the council made their mind up long before this session. They didn't go in to hear the company's position.
Why not cap the vendors who sell these restaurants supplies/food?
Restaurants are not compelled to use the services.
David Doyle, and his like, is upset because he has to pay more for a service (delivery) than paying his servers for dine-in at $3/hr. If he could pay $3/hr for delivery he would have no problem.
If its good enough for NYC is good for Boston? Way to lead. Why not just eliminate the council and copy whatever the NYC council implements?
Pages
Add comment