Technology

DoorDash v San Francisco

Last Friday, the city rejected allegations that its cap of fifteen percent on the commissions that third-party food delivery service platforms charge independent restaurants contravenes state and federal law. The 33-page motion to dismiss claims that DoorDash Inc. and Grubhub Inc.’s assertions are merely a collection of related, “legally flawed ideas.” 

The platforms filed suit in July, arguing that the ordinance, once temporary, but eventually made permanent, violates both the California and the United States Constitution by placing impermissible restraints on private commerce.

Law Street Media

To get more context on what really happened:

San Francisco asks courts to dismiss the case

The Ordinance describes the commission cap as an “important step[] to ensure that restaurants can thrive in San Francisco and continue to nurture vibrant, distinctive commercial districts.”. It applies to third-party platforms that serve twenty or more restaurants, and covers any restaurant that does not meet the definition of a “formula retail use” under section 303.1 of the
Planning Code (in brief, eleven or more establishments in operation, with two or more of standardized merchandise, façade, décor/color scheme, uniform apparel, signage, and trademark or service mark).

The law originally had a sunset date of sixty days after the amendment or termination of the pandemic “Stay Safer At Home” order or any subsequent order allowing restaurants to resume at 100% capacity. However, in June 2021, the Board of Supervisors voted unanimously to repeal the sunset date, so that the cap would continue in effect. The Mayor declined to sign the repeal measure, but it became effective without her signature.

Plaintiffs also contend that the Ordinance is unreasonable because the City has a budget surplus and could aid restaurants in other ways. But the City is not required to forgo its regulatory authority in favor of using public funds to soften the blow of high commissions that platforms can impose through their market power, and the alleged availability of unidentified policy alternatives is simply irrelevant under the deferential standard of review applicable here.

San Francisco asks the courts to dismiss the case

An interesting question here is if San Francisco county can (or should) cap earnings from a private company such as DoorDash which is offering a service that is sought by consumers.

Stocks, Technology

DoorDash and Uber Eats is gaining on Grubhub

Note that this is a share-price chart and not representing the sales of the various companies.

On Wednesday, the new parent company of Grubhub, Amsterdam-based Just Eat Takeaway.com, TKWY 0.33% also known as Jet, provided a third-quarter trading update. While several countries showed stellar growth, Grubhub’s business looked disappointing, setting a negative tone ahead of third-quarter earnings for DoorDash DASH 0.61% and the Uber Eats unit of Uber Technologies. UBER -2.67% One conclusion is that Grubhub’s trends signal an industrywide slowdown for food delivery in the U.S. More likely, Grubhub’s pain is its competitors’ gain.

Competition looks like a key factor, though. YipitData shows that Uber Eats gained market share in the third quarter at the expense of Grubhub, overtaking the incumbent to become the market leader in New York City. Meanwhile, data from M Science shows that the U.S. market leader, DoorDash, expanded its national share over 6 percentage points year over year in the third quarter, at least in part at the expense of Grubhub.

Wall Street Journal

Both DoorDash and Uber Eats appears to be doing pretty well in the delivery business in USA.