San Francisco is trying to cap the fees on food delivery apps. Economics 101 tells us what will happen when prices are forced down: supply falls. In this case, expect less food delivery. This assumes the market is functional, people are rational, etc.
I believe economics 101 tends to hold and constraining delivery of food is probably a bad idea. But, I also want to give policy makers the benefit of the doubt. What if they know all this, and still choose to limit prices? Which “side effects” may be intended effects?
One rule of thumb I use when encountering dumb-sounding top-down policy making is that unintended consequences may be intended.
This is a more complex, and interesting, conversation than proclaiming politicians as ignoramuses.
Also published on Medium.