Delicate Snowflakes

The model for the various services is straightforward: Use VC money to monopolize, or at least oligopolize, the market, and then raise rates.  (For this discussion, we will ignore their collusion with search engines to cheat customers)

Given the limits of VC money, it looks like they are moving toward the monopoly rent phase, and New York has responded with fee caps, so DoorDash, UberEats, and Grubhub are suing to stop the regulations.

I really hope that they get their asses handed to them in court:

A coalition of mobile-phone delivery apps is suing New York City over a local law that permanently caps the commission fees they can charge restaurants, the latest front in a nationwide campaign against city-imposed fee restrictions.

In a lawsuit filed late Thursday in the U.S. District Court for the Southern District of New York, the parent companies of six widely used apps ― DoorDash, Caviar, Grubhub, Seamless, Postmates and UberEats ― accused the city of “imposing permanent price controls on a private and highly competitive industry.”

They want to overturn a May 2020 law that prohibits them from charging restaurants more than 15 percent per order and more than 5 percent for all other fees. The New York City Council recently voted to make those caps permanent.

I would note that the "Other Fees" are the real killer, and rather opaque.

………

A city council spokesman said the fee caps are needed to protect restaurants against “predatory” practices of meal-delivery apps.

………

Nicholas Paolucci, a spokesman for the New York City Law Department, said the measure is “legally sound and we’ll defend it in court.”

………

The New York lawsuit is the latest legal action brought on by meal-delivery companies attempting to roll back restaurant fee restrictions that were imposed in the early months of the pandemic. DoorDash and Grubhub are challenging San Francisco’s rule, which restricts fees to 15 percent. Meanwhile, both companies are being sued by the city of Chicago, which accused them of being insufficiently transparent with fees charged to customers for delivery.

I might be a bit more sympathetic of the delivery services policies if their actions with regard to the restaurant did not reek so heavily of snake oil. 

I would note that the statement about, "Imposing permanent price controls on a private and highly competitive industry," looks like an attempt to invoke the freedom of contract argument which was used to invalidate wage and safety regulations before 1937.

I rather do expect the Supreme Court to re-invoke this moribund idea in the next few years, which is even more concerning than the whining of the food delivery services.