Lockdown Orders Have Devastated Restaurants. And now politicians are instituting price controls too?
Prices provide information. Restrict prices and one restricts the flow of information and in so doing people make bad decisions. With this warping ultimately comes much greater economic pain.
On Wednesday, the Portland City Council voted unanimously to cap the fees third-party delivery apps like Uber Eats and DoorDash can charge restaurants to no more than 10 percent of an order. The emergency law, which goes into effect immediately, limits these apps to a 5 percent fee for meals that are ordered through the app but delivered by restaurant employees.
But if people are ordering the food with much higher commissions (and higher prices) then what is the problem? In fact, if anything DoorDash, Uber Eats, etc, operating in a highly competitive market are even operating at a technical loss according to Bloomberg:
“At the moment, they’re kept afloat thanks to lavish subsidies from investors. That means consumers get deliveries for much less than they’d otherwise have to pay, and restaurants, far from being scammed, are in fact paying significantly below what the market would demand absent such support.”
This article was originally posted here: https://www.ac2news.com/2020/07/lockdown-orders-have-devastated-restaurants-and-now-politicians-are-instituting-price-controls-too/.