The COVID-19 pandemic highlighted how vital food delivery services and other third-party delivery services are to everyday Americans looking for a healthy meal. With people unable to leave their homes, consumers increasingly turned to third-party services to get their meals and fresh groceries. As the nation moves out of the pandemic, delivery services remain vital. One-third of the United States population used food delivery services in the past year. In addition, 93% of Americans have access to at least one delivery service, and 32% have access to multiple.
Lack of access to healthy food has become a significant problem for Americans. 10.5% of the population experienced food insecurity in 2020. Food insecurity is most prevalent in areas with little to no access to healthy food known as “food deserts.” Food deserts are areas in which it is difficult to buy affordable or good-quality fresh food. Living in a food desert can have severe impacts on an individual’s health as the lack of healthy options can lead to obesity and other chronic diseases. According to a recent study by the Brookings Institute, in areas traditionally labeled as “food deserts,” the service rate for third-party delivery services exceeds 95%. Furthermore, 90% of people living in low-income and low-access to food areas have access to at least one third-party delivery service. With a service rate in the high 90s and strong access to these services. Third-party services provide a simple solution to food insecurity by giving people access to healthy options that they do not have in their community. Most importantly, low-income communities in food deserts are taking advantage of these services. In fact, Uber Eats delivered 226 million and 136 million orders to low-income and low-access communities in 2021 alone.
Now, instead of making it easier for people to access quality food, lawmakers are seeking to handicap these essential delivery services by restricting their ability to charge fair market fees. Fee caps are legislation that would place a cap on fees that third-party delivery services could charge restaurants. Legislators have tried to market price caps as a tool for fairness to restaurants. However, fee caps make it impossible for restaurants to bear the costs of delivering food to their customers voluntarily. Both parties contractually agree to the fees that restaurants pay to delivery companies. Rather than offer their own service, restaurants typically find it more profitable to use third-party companies. However under a fee cap, restaurants lose the ability to attract more customers by shouldering a higher portion of the delivery fee.
As a result, all fee caps do is pass on more costs to consumers. These new costs will effectively price out those in lower socioeconomic areas who rely on food delivery services, or at worst force these services to completely cease operation in capped markets.
Price caps on food delivery services are a solution in search of a problem. They may be marketed as protecting restaurants, but in reality restaurants and grocery stores relied on delivery services to keep their businesses afloat. These services were a net good for everyone. Restaurants and grocery stores are not coerced into doing business with these delivery services but rather have total autonomy. This “solution” will do nothing but harm those who need these services the most: people living in underserved communities who rely on them to get fresh groceries and healthy meals.