The Revolt Against the 30% Mafia
When did Big Tech gatekeepers from Apple to DoorDash decide they were entitled to a third of the internet’s sales?
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An unlikely trend in local governance started taking hold last spring while most Americans were still sewing their own face masks. Starting in San Francisco, American cities and later whole states began enacting extremely simple regulations designed to soften the financial blow of a malign force choking America’s most vulnerable businesses with extreme commissions. The bills passed too quickly for lobbyists to festoon them in loopholes or deliberately ambiguous language, and they were such obvious no-brainers that copycat bills eventually passed in some 73 municipalities, in the end saving probably thousands of merchants from financial ruin.
The laws were the delivery app fee caps, which for the most part placed 15% limits on the commissions DoorDash, Uber, and Grubhub could charge restaurants during the pandemic. These laws cut restaurants’ delivery app bills in half in the cities that passed them, saving any restaurant that did a substantial amount of delivery app business thousands of dollars a month. Often, the apps retaliated by tacking on $1 to $2 order fees to customers in the cities that mandated the caps (called, say, the “Philadelphia fee”), but that was okay: Cost-conscious customers started picking up their own food. For casual restaurants selling food that held up well in takeout boxes, the fee caps made operating without their dining rooms almost sort-of viable, at least so long as they didn’t get evicted.
But the caps also represented the start of a grassroots revolt against the 30% Mafia, an unimaginative label I’ll use for the increasingly unimaginative syndicate of Silicon Valley gatekeepers who’ve made a business model of charging businesses from booksellers to hotels 30% of their top-line revenues for the privilege of existing on the internet.
I can’t find many examples of middlemen that commanded that kind of take during…
