Minneapolis’s Proposed Ordinance Would Undercut Food Delivery Services

The following is a statement from ACI Director, Krisztina Pusok, regarding the Minneapolis City Council’s proposed ordinance that would undercut food delivery services and economic recovery:

“We are very concerned with the repercussions that the proposed ordinance 2021-00906 could have on consumers and restaurants in Minneapolis. The proposal, which would cap the fees third-party platforms can charge restaurants for deliveries to 10%, although intended to benefit small businesses, would backfire on the very constituency 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 is a very aggressive action by the city council to get involved in how companies set their prices. It could ultimately lead to increased costs to small business owners and customers and lower pay for 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 restaurants 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 Minneapolis City Council should prioritize ensuring that restaurants are able to stay afloat and NOT jeopardizing their sales and survival at a time that is already exceedingly challenging.”

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