SF mayor caps commissions for food delivery startups to 15% during the pandemic; startups say the cap will raise customer fees, hurt delivery people's income
& restaurants can always do their own Be careful @LondonBreed, the city interfering with the invisible hand can have unintended consequences—like the delivery services leaving SF & lawsuits https://twitter.com/... Shai Goldman / @shaig : If you haven't dunked on this tweet, can you really call yourself part of the tech community? Unpopular opinion: this isn't really that big of deal https://twitter.com/... @aridavidpaul : Surreal. Mayor of San Francisco is reducing food deliveries by decree with price caps. Politicians will create food shortages even where covid19 couldn't. Such simple self-destructive behavior. https://twitter.com/... @alecstapp : SF Mayor announces she's adjusting the pricing structure of food delivery two-sided platforms, lowering fees charged to restaurants and raising fees charged to consumers. The net effect of this policy will be, uh, *checks notes* ... nothing https://twitter.com/... Culinary Backstreets / @cbackstreets : This is how to help local restaurants, which play an incredibly important role in our cities. Bravo! https://twitter.com/... @naval : San Francisco decides that it would rather have no delivery service than pay what it costs to boost supply in difficult times. 🤦🏽 https://www.sfchronicle.com/ ... Umang Jaipuria / @umang : I know, the obvious reaction is that this is terrible. But taking the opposite view (in support of Breed) for a sec: SF has relatively low price elasticity. Delivery services can simply transfer the fees over to the end-user. Most will pay. Restaurants need the money. https://twitter.com/... Marcelino J. Alvarez / @mrlnmarce : Why not pass the cost to the consumer instead of hurting the restaurant? Not sure I agree that restaurants can stand up delivery infrastructure. Also not entirely sure that free market rules apply here - see Uber surge pricing in the wake of NZ shooting. We are in a crisis. https://twitter.com/... Nabeel Hyatt / @nabeel : I love that London is trying to help & taking quick action. But this is going to hurt local restaurants way more than it helps. No one believes delivery companies are massive profit machines, the incentives are aligned here to drive the volume that keeps jobs w/out intervention. https://twitter.com/... Nabeel Hyatt / @nabeel : @kimmaicutler Deliveries companies run a three lever business to keep 1. restaurants open & on the platform, 2. drivers driving, and 3. consumers ordering. I've seen what happens when you yank one lever without care and it's bad for all parties. Nabeel Hyatt / @nabeel : @kimmaicutler Passing the buck to consumers will depress demand, which mean restaurants fire more ppl and drivers get less work. These are very finely tuned businesses that even those companies took years to work out how to manage sustainabily for all parties. Mitali Pattnaik / @mitali : this is the worst possible thing you could do to encourage more delivery! complete stupidity. and you were doing so well Mayor Breed 🤦♀️ https://twitter.com/... @webdevmason : In my area, Uber Eats has been offering free delivery *specifically for local businesses* + discounts on large orders to keep demand up and keep cooks working. I find it absolutely flabbergasting that @LondonBreed thinks she knows how to run that business better than the CEO. https://twitter.com/... Alex Esber / @alexesber : It's sad how self defeating San Francisco is. We want cheaper housing so we're going to not build housing. We want more restaurant delivery so we're going to make it cost prohibitive for delivery companies. https://twitter.com/... Marc Goldwein / @marcgoldwein : Cool. So how are we going to make sure the delivery services can continue to pay people to put their health at risk so others can eat. https://twitter.com/... Jon Fleischman / @flashreport : This is overreach. The market can deal with this. Is there evidence of some sort of severe price gouging? Delivery companies also “deserve” to keep their doors open and make a profit. https://twitter.com/... Scott M. Stringer / @nyccomptroller : Food delivery workers are some of the most important people in the City right now. We need to be doing everything we can to support them and the restaurants that employ them. NYC needs to institute a cap on fees from delivery services NOW. https://twitter.com/... Timothy B. Lee / @binarybits : My initial reaction is that this is a bad idea. Delivery platforms are already losing money and capping their fees could force them to cut back deliveries. But on second thought, this is a two-sided market. https://twitter.com/... Timothy B. Lee / @binarybits : Of course, customers might respond by ordering less takeout. In which case restaurants might have to cut their prices and everyone would be roughly back where they started. Rat King / @mikeisaac : very interesting timing from DoorDash, which sent out an email yesterday saying they're choosing to lower fees on SF restaurant commissions.... https://twitter.com/... Michael Arrington / @arrington : Price controls are how you ensure things aren't available. https://twitter.com/... @techchronicle : San Francisco is the hometown of Uber, Postmates and DoorDash. But the city is now capping those companies' delivery fees on restaurant meals after an outcry by local chefs, @JustMrPhillips reports: https://www.sfchronicle.com/ ...
Context & Ripple Effects
San Francisco's emergency 15% commission cap on delivery apps is the opening move in what becomes a multi-city fight over platform take rates. Within days, an SF supervisor accuses Uber of retaliating by ceasing deliveries to low-income neighborhoods, and a year later New York votes to make caps permanent — first via five bills extending the cap to Feb. 2022, then a 23% permanent cap below the ~30% apps typically charge.
First-order effects
- DoorDash, Grubhub, Uber Eats, and Postmates immediately lose roughly half their restaurant-side revenue per order in SF, and the startups say they will offset it through higher customer fees and reduced courier pay.
- Restaurants get near-term relief on the highest-cost line item during pandemic-only delivery operations, while the city gains a lever over platforms it previously priced freely.
Second-order effects
- Uber's alleged pullback from low-income SF neighborhoods shows the retaliation playbook — service withdrawal as negotiating pressure — that cities must now anticipate when capping fees.
- New York's adoption of the same tool, culminating in DoorDash, Grubhub, and Uber Eats suing NYC over its cap law, turns a local emergency measure into a national legal test of whether take rates are regulable.
Third-order effects
- If caps spread and survive litigation, delivery platforms shift from maximizing take rate to monetizing customers, subscriptions, and logistics add-ons — with regulators, not restaurants, effectively setting the core price of marketplace access.
- The pattern points toward permanent regulation of gig-marketplace economics, forcing platforms to disclose and defend their cut the way payment networks do interchange.
The trend: Emergency pandemic caps on delivery-app commissions are hardening into permanent, litigated regulation of platform take rates across US cities.