The following is a statement from ACI Director, Krisztina Pusok, regarding the Minnesota Legislature’s proposed legislation that would undercut food delivery services and economic recovery:
“We are very concerned with the repercussions of language included in the Minnesota House budget and its impact on consumers and restaurants in the state. The proposal, which would temporarily cap the fees third-party platforms can charge restaurants for deliveries to 10%, although intended to benefit small businesses, would backfire on the very same it is supposed to help – the restaurants.
Due to the loss of dine-in service, delivery apps have been a lifeline to isolated customers during the COVID-19 pandemic, and modifying what is already working would increase only uncertainty during a time when restaurants are fighting for their survival.
The proposal would essentially set price controls on the idea of food delivery. We believe this a very aggressive action by the legislature to get involved in how companies set their prices as it could ultimately lead to increased costs to small business owners and customers and lower pay for company delivery drivers due to decreased order volume. Since the costs will have to get recuperated somehow, customer fees would go up and worker pay would suffer. Additionally, the added cost of having to hire and manage their own delivery would be just as, if not more, expensive than using third-party platforms.
Many restaurants would probably not have been able to be in business during the pandemic if it wasn’t for the delivery platforms to offer their products. The Minnesota Legislature should prioritize ensuring that restaurants are able to stay afloat and NOT jeopardizing their sales and survival at a time when they already do not have enough revenue coming in the door.”