Want a pizza? Assuming you don't live too far from the city lights, someone will bring it to your door. That's been going on for so long that you can take it for granted.
If your desire de jour runs more toward a burger, or top-quality ramen, or just the sort of flavor profile you find onerous to reproduce at home (simplest hint: more butter), that's now also at your fingertips in urban areas. A website or app will show you an array of menu options. With a few taps and due time, you can expect your meal to materialize. You don't even have to talk to anyone.
Very convenient. But you'll pay enough in fees for the privilege that you'll question your pecuniary judgment. And the food may not always arrive warm, or at all. And if something goes wrong, you'll enter the surreal, scripted world of customer service.
It's tempting to see all this as an emblem of a lazy, gluttonous modern society, but that sells it short. Imagine busy parents, unexpectedly working late, still needing to put a meal on the table. Imagine the ill or the elderly who can't get out and about. On-demand delivery can be a blessing. (This comes into clearer focus as options expand beyond wants into basic needs.)
But all is not well with the trend, because it has introduced a middleman where a middleman wasn't. That tends to result in concerns over fair dealing, which tends to result in requests for government intervention.
(Responds government, intrigued: "Did someone say intervention?")
In addition to the fees they charge to delivery recipients, third-party companies also charge restaurants and retailers for the benefit of being listed on the service. The commissions can be eye-popping, upward of 30%. For restaurants operating with low margins — particularly the smaller, independent ones — that's a challenge. But they also find it hard not to participate.
During the pandemic, many local governments placed temporary caps on such commissions, typically 15%. That was reasonable in a time of strain for the restaurant industry.
Since then, some cities have made those caps permanent. Earlier this month, Minneapolis joined them. Yet this is a situation government should resist remaining involved in. Market interference via price control has unintended consequences. In some cases, delivery companies simply transfer costs to consumers, calling them regulatory fees. In others, they've taken their cases to court.
Many people will find the plight of restaurants sympathetic. Yet because the industry was slow to address the delivery market, somebody else addressed it instead, on terms the industry now finds unfavorable.
The delivery services are not finding it easy to turn a profit, either. Their business is still developing. There are dominant companies like DoorDash (as a historical analog, think Starbucks in the 1990s); smaller companies like BiteSquad that want to expand (think: Caribou Coffee, same era); upstarts focused on fixing the flaws (like coffee's third wave), and finally, conglomerates waiting to see what they can snap up.
Government should let things play out for now. As things shake out, it will have a role in overseeing food safety and price transparency, but not price itself.
What's important to remember is that everyone has options. Restaurants, if they find it feasible, can manage their own deliveries. Or they can enlist with delivery companies that seek a social as well as financial contract. Consumers can eat meals in person or patronize only the delivery services that meet their expectations. And the delivery companies can seek to succeed on scale or fill a niche.
It's the marketplace at work.