📲 🚗 Doug Ford's Delivery App Ask

⛏️ Forget the Shovels: Let's Build Digital Infrastructure!

Vass Bednar

and

Jon

Oct 19, 2020

This is a newsletter about public policy and technology [regulation stuff] in Canada. 🇨🇦

Brian Fung @b_fung

Tech platforms designing their policies

🤡 This week’s wildcard was prompted by Jon Shell (@jonrshell), who is the Managing Director and a Partner at Social Capital Partners (”SCP”). SCP is building a more resilient economy through broad-based ownership and quality employment.

Jon and I were talking (*emailing) after I wrote about ghost kitchens and we tried to imagine a digital public alternative to Uber Eats. In happy news - we’re not the first people to engage on this, and we won’t be the last. As always, we look forward to your comment and reactions. 👇

Doug Ford @fordnation

Thank you to @DoorDash and @SkipTheDishes for proactively showing leadership in the food delivery sector while indoor dining is closed in Toronto, Peel and Ottawa. Let’s keep it up by continuing to support local restaurants and lowering costs for small businesses and consumers.

Ontario is pretending it will or can regulate food delivery platforms. It should build one instead.

CP24 @CP24

Ford urges food delivery companies to slash commission to help restaurants survive second wave cp24.com/news/ford-urge…

Ontario Premier Doug Ford has recently “asked” food delivery apps to cut their fees. Amazingly, Canadian food delivery apps Skip the Dishes and Toronto-based Ritual *actually* responded with polite time-bound discounts (!). These concessions are modest; and effectively business-development initiatives for the companies - allowing them to sign on more restaurants that will (in theory) eventually pay their burdensome subscription and commission fees.

NOW Magazine @nowtoronto

Uber Eats responds to Doug Ford's plea to slash commission rates.

Ontario restaurant group plans to launch food delivery serviceToronto’s delivery wars seem poised to heat up as Uber Eats responds to Doug Ford’s plea to slash commission ratesow.ly

Uber Eats Canada responded by reducing the “delivery-only” commission rate on orders restaurants process themselves using an online ordering platform. The commission will drop from 15 per cent to 7.5 per cent across Canada until the end of the year.
The company also extended a zero per cent commission on pick-up orders until March 31, 2021.

Instead of politely asking these firms to fundamentally change their business structure, maybe Doug should put them out of business entirely by investing in ethical digital infrastructure. Doing so would take courage, creativity, and a deep commitment to supporting the restaurant industry.

Let’s be real: to date, policy people have been pretty limited when it comes to helping restos. Despite their best efforts, decision-makers are working with limited levers when it comes to sufficiently supporting the restaurant industry. We’ve temporarily reclaimed sidewalks as patios, offered commercial rent assistance, extending the wage subsidy, and...not much else. Free heat lamps?

The government response has been a blend of federal support and municipal maneuvering. The role for the province hasn’t been clear - until now. Given that Doug and [the Hon.] Chrystia [Freeland] are BFF, they could consider allocating some of those sweet Federal infrastructure donairs towards an investment in digital public infrastructure. And this wouldn’t have to be limited to the province of Ontario, it could extend to all the provinces and territories. For once, California could look to Canada for some serious tech policy inspiration.

As natural champions of local businesses, politicians have been reduced to simply promoting curbside pick up as a technique to circumvent delivery surcharges. But ordering takeout isn’t [a] public policy, even though it lends itself nicely to virtue-signalling. 😉

Lauren Pelley @LaurenPelley

My policy throughout the pandemic has been to tip heavily, twice as much as normal, on any restaurant takeout, delivery, cocktail kits, and so on. If you can afford to stay safe at home and order-in, you can afford to pay it forward.

Here’s How You Should Tip At This Point In The Pandemic“You should tip to the point of pain,” one expert said, unless you’re in one of a few categories.huffingtonpost.ca

Suresh Doss @Suresh

With today’s shutdown news for indoor dining, consider takeout from places. There’s a real chance many small restaurants won’t survive this winter. I’ve got two maps for you, CBC one updated. Will update the other tonight. bit.ly/cbcfoodguidemap and

Toronto (and beyond) Takeout/Delivery options - Google My MapsA food and drink resource during the COVID-19 pandemic. You don’t have to use this map, but if you wish to support local restaurants (many won’t survive the coming weeks) here’s a resource.This map will get obsolete as the days progress, will try to maintain it. Also added breweries/wineries that d…bit.ly

Hazel Mae @thehazelmae

Back in the day, I worked in the restaurant industry. My ❤️ goes out to those affected by today’s announcement by the provincial government. I encourage those in a position to do so, to order takeout/delivery for this year’s Thanksgiving dinner/celebration. Stay vigilant/safe

The 30% commission from these apps is not a new problem nor is it particular to the pandemic. Some Toronto restaurant owners are even delivering their own food to save on hefty app delivery fees.

Ontario could (as ever) look to California for policy inspiration when it comes to taking on online delivery companies.

Just last month, Governor Gavin Newsom signed a Bill regulating food delivery apps. The Fair Food Delivery Act of 2020 prohibits food delivery apps from arranging deliveries without getting permission from the restaurant or store to take orders from there. While it’s definitely important for delivery platforms to obtain clear consent from restaurants to advertise their offerings, the Bill is silent on commissions.

NYTimes Tech @nytimestech

When you open Uber's app, you will get more than an option for rides. You will be bombarded with the company's lobbying campaign.

You Can’t Escape Uber’s LobbyingJust being a customer now makes people a target for inescapable corporate advocacy.nyti.ms

California should also be a source of caution for Dougie. Gig companies Uber, Lyft, DoorDash, and Instacart have together spent at least $170 million USD to back Proposition 22. That’s a lot of meatballs! Early in the pandemic, Postmates, Doordash, and UberEats declined a plea from the Golden Gate Restaurant Association for a 50 percent rebate for restaurants.

Josh Eidelson @josheidelson

Uber, Lyft, Instacart, Postmates, and DoorDash have put about $180 million – & a slew of in-app messages – behind their push for California Prop. 22, one of the most nationally consequential things on any ballot this year. Here’s some context on how we got here & what's at stake

Attempting to cap the commission could be another part of the province’s work to regulate delivery apps.

Policymakers in Los Angeles, New York, San Francisco, and Seattle, as well as Jersey City, New Jersey, and Washington, DC, have passed emergency bills capping the apps’ commissions. But the delivery services may respond to the regulations by raising prices to consumers, which could hurt sales. For instance, after Jersey City imposed a 10 percent cap on commissions, Uber raised local ordering fees by $3.

So the province could consider sinking some serious cash into trying to reign in global tech platforms that are dedicated to dominating the food delivery space. Or, it could take a perfect opportunity to consider building robust digital infrastructure as a substitute.

What would a food delivery app worth recommending to citizens look like?

A minimum, if not living, wage for delivery professionals - salary?;
Health insurance;
Price transparency;
Open standards;
Data protection;
Other?

What is the “commission” intended to cover - marking costs, logistics, and payment.

What if the province built its own distribution app that could ensure living - or at least minimum - wages, subsidization for main-street restaurants and some sort of safety standard for mobility and delivery? The province could also consider how dormant or under-utilized large-scale cooking infrastructure at convention centres and/or hotels could be leveraged by ghost kitchens during the fall and winter.

Building a public food delivery platform is not that radical of an idea. The reality is that these platforms are already heavily subsidized by VC capital and they (definitely) aren’t profitable(!), so re-imagining them as being *publicly* subsidized and structured as a non-profit or a co-op isn’t that big of a stretch.

🤷 Why not reimagine technology platforms as public goods?

🤷‍♀️ What if this was the infrastructure we built?

🤷🏿‍♂️ How many good jobs would that create?

🤷🏻‍♂️ Are we still a “roads and bridges” world anyway?

Doug Ford is right that food delivery apps gobble too large a margin. But he is wrong (albeit adorably optimistic) to imagine that the province can effectively regulate these platforms in the short term. Instead, it is worth talking about how food delivery could be subsidized, and what kind of unintended consequences could follow. There are also plenty of vetted and virtual Canadian technology companies that could be a productive part of this re-imagining, like sociovore and Kitchen Hub. Perhaps we are not as limited in our choices when it comes to delivery as we think.

🛍️ Even a simple advertising platform for local restaurants that facilitates directly ordering from them, for curbside pick up, would be a step up.

Chris Hayes @chrislhayes

@DouthatNYT A national Bar Rescue that basically pays for bars, restaurants, nightclubs, theatres and concert venues so they can all stay closed for the next six months at least. Would probably save money net net.

What else? It’s also worth remembering that COVID has changed the distribution of the population, and thus the geography of food delivery hubs may also be shifting. The state was a first mover in the business of delivery with Canada Post. Maybe there are lessons we can import.

In the interim we should remember that delivery apps are fundamentally a marketplace. It doesn’t cost anything for restaurants to be “on” them, in fact, it’s essentially free advertising (or “demand generation”) that can be a good way to convert customers. But right now, advising Ontarians to order directly from restaurants is the most responsible way to encourage take out. Here’s a tip: ordering the Ontario Digital Service to prototype an ethical alternative should be the bold next step to take on big tech. Making such an intervention “ethical” fundamentally starts with sustainable operations - an elusive goal for most of the apps.

While we’re at it, here’s another wildcard: imagine Ontario offering a digital business permit that gets a restaurant rent and salary subsidies and in return they offer delivery and pickup services on the infrastructure.

To truly support local restaurants across the province, Doug Ford should take delivery platforms out (of business).

Anne Thériault @anne_theriault

One upside of the pandemic is that it has allowed me to rebrand ordering delivery from “ugh too lazy to cook or even get pre-made food from the store” to “virtuously supporting local businesses during this difficult time”

💁 Could you see this happening in the province? Tell us in the comments!

*NB - Examples of ethical delivery alternatives (I am probably missing SO many):

A restaurant-run co-operative model, as being explored by here in Toronto by Roger Yang
Montreal’s Radish, an online delivery cooperative that is looking to bring forth a more equitable relationship between restaurants, delivery drivers and consumers.
The head of the Ontario Restaurant and Motel Association (ORHMA) recently told NOW Magazine that the industry group is preparing to enter the space with its own service.
Love Local Delivery;
Urban delivery service provided to merchants;
Black-owned delivery startup Chewbox (US, LA-based)
Everybody Eats, customers who normally struggle to eat because of inaccessibility to affordable meals can order from the service at a discounted price.

blogTO @blogTO

Toronto restaurant looking for cosplayer delivery people bit.ly/2T3WXZN #Toronto #Cosplay #deliveryTO

Toronto restaurant looking for cosplayer delivery peopleA Toronto restaurant is now hiring cosplay delivery drivers, so if you’re on the hunt for a job that’s as wacky as you are or looking for a fun soc...bit.ly

🤓 Vass Bednar is a smart generalist working at the intersection of technology and public policy.

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