Portland’s New Price Control

Before SARS-Cov-2 began spreading around the globe, restaurant customers were already beginning to order delivery more often, using apps like Uber Eats and Grubhub. When dining in became illegal, that trend accelerated apace.

When restaurants could no longer legally serve customers inside, and the number of customers willing to pick up a to-go order remained small, these apps provided restaurants with a delivery infrastructure few eating establishments had, a means of selling to customers that most restaurants still don’t have.

But like restaurants, these services, of course, charge for their service. In a classic case of biting the hand that feeds you, the City of Portland passed an ordinance this week capping those fees at 5% of the order, a quarter of what I typically tip a waitress.

The rationale is that restaurants are desperate for delivery sales in this pandemic. Reducing the portion of their sales that go to delivery services will increase restaurants’ revenue. Missing from this motive is any concern that the number of deliveries may decline.

Many restaurants probably know better. They are the brunt of another price control, the minimum wage. Restaurants know how that lowers demand for restaurant labor. Reducing the financial feasibility of deliveries might not be so good on the demand for restaurant labor either.

Eric Shierman lives in Salem and is the author of We were winning when I was there.