business news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

•  From the Wall Street Journal:

"Food-delivery services say some restaurants are scaring off customers by charging significantly higher prices for food they deliver. But persuading restaurants to rethink their pricing is proving to be a tall order.

"In recent years, many restaurants and chains have steadily raised prices on food they sell via delivery apps such as and Uber Eats, which charge between 15% to 30% of an order in commissions. The restaurants’ stance: The only way they can make delivery profitable is to pass on app fees and the rising costs of food and labor to consumers.

"Lately, the apps have pushed back, deploying their own tools to make price increases painful for restaurants. Who prevails will affect how much food delivery costs customers.

"In the past year, DoorDash has experimented with threatening to make restaurants that significantly mark up prices less visible in its app and deactivated some, according to emails reviewed by the Wall Street Journal

In March, the company also began testing a label in some cities that shows consumers when a restaurant’s delivery menu is priced at par with its store."

I understand that there is price sensitivity, but this is yet another case where people and companies seem to be in denial about a basic fact - services cost money.  Somebody has to pay for it, and part of the calculation should be establishing the value of a service in the mind of the consumer.  The way the Journal describes the scenario, it sounds like the whole house of cards is going to collapse at some point.  Which wouldn't be good for anyone.