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How might delivery apps evolve in a new regulatory climate?

Meghan McCarty Carino Sep 24, 2021
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OLIVIER DOULIERY/AFP via Getty Images

How might delivery apps evolve in a new regulatory climate?

Meghan McCarty Carino Sep 24, 2021
Heard on:
OLIVIER DOULIERY/AFP via Getty Images
HTML EMBED:
COPY

New York City lawmakers passed a package of new laws aimed at improving conditions for workers who make deliveries for apps like Door Dash, Grub Hub and Uber Eats. It’s just the latest effort by a city to regulate the apps, which have soared in popularity during the pandemic.

The new worker protections include minimum pay, access to bathrooms at restaurants and greater transparency around tipping. They come after a wave of measures in other cities that have limited how much the apps can charge restaurants.

“You know, the other shoe was going to drop at some point and it’s dropping now,” said Sucharita Kodali, an analyst with Forrester. “There was just not enough margin in restaurant delivery, to make money.”

So, she said, the platforms have depended on holding down the cost of labor and other efficiencies.

With increased regulation, the apps could pass more of the cost to consumers says NYU business professor Arun Sundararajan, or bypass traditional restaurants.

“And more about ghost kitchens and commercial kitchens, you know, being set up purely for delivery,” he said.

He adds those operations are more efficient and easier to scale up.

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