Councilors want Boston to build a municipal online marketplace to help small businesses fend off the Amazons and Grubhubs of the world
A City Council committee will consider a proposal for Boston to build a digital marketplace that local small businesses, including restaurants, could use to offer their wares as a way to compete with the big providers.
Councilors Tania Fernandes Anderson (Roxbury) and Ricardo Arroyo (Hyde Park, Roslindale, Mattapan) proposed the idea at a council meeting today.
The two said the idea is to build the sort of e-commerce infrastructure small businesses, in particular in heavily BIPOC communities, could not create on their own - Arroyo said 80% of Boston's small businesses are owned by immigrants, many of whom would be unfamiliar with the intricacies of online commerce.
Their proposal could also integrate support from City Hall's existing programs to support small businesses to help them thrive, Fernandes Anderson said. They noted the problems restaurants had with third-party delivery fees at the start of the pandemic, when in-person dining was banned.
Arroyo said that one of the things he most appreciated about former Mayor Tom Menino was his commitment to keeping large big-box stores, in particular, Walmart, out of Boston. Even today, Arroyo said, he refuses to step into the Target in his district, in Roslindale Square, as one small way to support local small businesses.
The proposal now goes to a Council committee for study before the council as a whole gets to vote on the idea.
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Multi-tenant, secure e-commerce infrastructure is a very hard problem. It's really not the sort of thing which government agencies do well.
I'm all for supporting small local businesses but this is not the way to do it.
For example: See any government web site.
Many Government web sites are great
The ones built years ago that don't have flashy interfaces and give clean access to public information. The JS heavy sites with dozens of remotely loaded libraries are the problem.
But yeah, for the city to attempt to develop any sort platform like this is lunacy. There are plenty of platforms already available that cater to independent businesses. If anything, the city could hire a consultant to help struggling businesses sign up for these services.
Look at Toast for example. It's a Boston company! They are well liked by small restaurants specifically because they require far less overhead and restrictions that come with the bigger platforms.
Yep, but ...
E-commerce is hard!
And that's probably why, if you pay any bills through boston.gov or the BWSC site, you'll notice you're actually using a third-party provider once you get to the point of making a payment.
There are any number of companies that provide such services - one thing I've learned in the pandemic is that a company called Foodtec Solutions has pretty much wrapped up the pizza/sub/Chinese food restaurant market in Boston (what's nice for a lazy person like me is that while the restaurants can customize their sites to some extent, they all work basically the same, so once you know one, it's easy to order on another).
The problem here is that we're potentially talking about a site that would have to handle dozens of different types of stores - a restaurant Web site would be a lot different from, say, a clothing or book shop.
And, at least in the restaurant space, a major issue is not the Web site itself (like I said, Foodtec is way popular), but the fact that oftentimes now, when you search on a restaurant on Google, you first have to wade through several other ordering options for a given restaurant, all of them really Grubhub or other fee-charging delivery services before you get to the restaurant's own site.
The biggest reason the city currently farms out payment systems is because.. there's just better people out there who do it. Plus the city bypasses any compliancy issues because they aren't the ones processing the cards. Credit card processors have all these rules and regulations that have to be met to process cards on the web, along with regular scans/detections.
It's alot of work to keep up with this. Farming it out means, it becomes someone else's problem.
Trust me, its better this way.
In addition to the front end, my first thought was that if you want to compete with Amazon or any of these services, most of the work is going to go into the unglamorous work of fulfillment. You can't just build a shiny front end website to take orders and call it done.
How can Arroyo say he
How can Arroyo say he appreciated Menino being against chain big box stores with a straight face, when Meninos biggest legacy is the upscale chain-filled mall called the seaport? Menino loved chains, just not in his neighborhood if of Hyde Park.
Not Hyde Park
He's talking about the Target in Roslindale. The one with a CVS Pharmacy inside of it. When Ashmont Discount closed, the first proposal was for a Brook Pharmacy. This was blocked by Menino not because Brooks is a large, faceless national chain, but because he didn't want Sullivan's Pharmacy to face competition. I mean, he said that in his autobiography. The CVS locations were springing up in the rest of the city like weeds at the same time wasn't the point- keeping competition out of the Square was.
And that's why I smirk every time I pick up my medicines at the CVS at the Target in Roslindale.
What about the South Bay
What about the South Bay Center? It's the biggest car-oriented sprawl development in Boston from the early 90s. Was Menino involved in its planning?
there's plenty of existing companies the city could partner with to offer such a service at a subsidized rate or similar that would be a lot cheaper and probably have better results than trying to develop their own?
This is what the order calls for: a hearing to discuss the possibility of a "pilot digital marketplace with technical assistance for minority-owned small businesses that would address operations, lack of capital, build a “public option” for a local online marketplace owned by the people, partnership with local community service providers, transition brick & mortar business operations online as well as their inventory to be offered as an alternative to online conglomerates by implementing data collection, coalition building, built environment plan for financial sustainability level, policy centering small businesses, tech adoption, and the development of the future small business infrastructure."
I don't think it's just the terrible grammar that makes this unintelligible. It's like every idea related to small business stuffed into a single sentence with the assertion that a "digital marketplace" can address everything.
This is the best those councilors can do? Embarrassing.
Give everyone a seat at the table
This sounds like they did a "listening tour" and then wrote down every suggestion that was made and plunked them all into one sentence.
Sounds well intentioned and
Sounds well intentioned and good on the surface but before spending our tax money on this, it would be nice if our councilors spent some time studying the (un)profitability of the existing ventures. Food (and people) delivery in particular will always be a lousy business model. In spite of the low wages paid to the deliverers and high fees charged to restaurants and sometime customers, all these companies are still operating at a loss.
Doesn’t sound like rocket science to me and I never understood the buzz behind it; no advanced math required. For a food (or people) deliverer to pull the minimum wage ($14-15) it may cost $35 or $40 per hour of operation when factoring vehicle cost, platform operation, promotion etc. And what’s the average; 3 deliveries an hour if you are lucky? That makes it a breakeven point $10-$15 per delivery that someone has to pay for; driver better pray for some good tips. That’s without even getting into the amount of carbon involved in delivering a Big Mac or a pizza; much of which will likely end up in the trash.
I remember reading a few years ago how "The Ride", the MBTA's service to people with mobility issues was subsidized at $45 per ride and service wasn't great. Ironically, the MBTA went into some partnership with Lyft and Uber in order to improve service and lower cost, with mixed success from what I last heard.
Think within the box
The best thing the city could do is just make it cheap and easy to operate a business in the city. Expedite the permit process and make it cheaper. Remove restrictions whenever possible. Reduce delays on the city side.
One example: It takes forever to get a ISD inspector out, the fees are high, and the process can be confusing. That's a solvable problem.
One of councilors had a proposal to allow small scale commercial food prep in residential units. Good idea! Make that easy and inexpensive and it opens up opportunities for people that can't afford to rent a commercial kitchen.
Liquor licensing is out of the city's hands but Wu would have an easier time changing that vs most of her other goals that require state changes.
Private companies can handle creating e-commerce platform but only the City of Boston can reform how city departments operate.
One thing I thought about
One thing I thought about when I was running a Main Street program in Boston was how people had no clue what was in any given store and that maybe they would get more customers if people knew what they had.
So the idea would be to use the Main Street districts to build off of. You would do a basic inventory of what stores carry ( not what's in stock that would be impossible) andale it searchable. So if I'm looking for pillow cases or diet coke or perfume , it would all be in there and the site would tell you which local stores carried those products.
Can he be any more patronizing?
Maybe he can show them how to use a computer and smart phone. as well.
Oh, well, then, here's a business opportunity for you
Have you ever set up your own online shop?
I'm betting no.
People tend to underestimate the ability of immigrants and other groups when it comes to technology. These groups are not going to be jumping into enterprise level computing but they aren't helpless and the days of needing to run your own servers in a closet are over.
What people need more help with is on the representation side. These groups get taken advantage of by larger companies and they don't have the resources to fight back.
Example: Small, single person companies uses Paypal for payment processing. Paypal freezes the account for a stupid reason. The person doesn't have cash reserves to fall back on while the problem gets sorted out. Any language barrier gets amplified.
Or the business hires a contractor who ends up doing incomplete work knowing the owner would have a hard time taking them to court or getting the city involved.
I had a reply that I abandoned (cuz it was 330a and I was still writing it) that was sorta like this.
It would be better if the city used its power 'as the city', for marketing and 'power in numbers' things.
Offer free/reduced website accounts with ecommerce**
Offer access to better ecommerce software like shopify (i.e. so you aren't using paypal.. PP sucks btw)
Create a website and online directory of business who access these services
Use the city's powerful marketing brand to promote businesses on social media
Use the city's leverage to get better charge rates for processing cards (meaning the city approaches a process and says "hey we have 300 online stores that will process cards, give me a better rate to pass this along to them")
Maybe offer some courses at local community colleges or libraries about 'internet marketing 101' 'how to social media market' or just help getting their new site online. These could be offered in all languages to make sure everyone can attend.
Just seems like educating people, teaming up with vendors that already do this very well, and using that city leverage to get better rates.. just seems to be a most cost effective thing to do (and probably one of the easiest)
The city could hire a tech liaison to help make this all happen. Maybe a social media person dedicated to promoting Boston businesses. Just seems to be alot more cheaper and more effective to successful outcomes.
** The city could team up with Comcast and Verizon (City's ISPs), write it into their franchise agreement to offer free ecommerce web space to any city resident, regardless of who their internet provider is. Thus not costing a city a cent to offer free web hosting.
I'm not a small business owner
And if I were I'm certain I'd know someone who could do it for me if I didn't know how. Immigrants are not ignorant of technology, even if Arroyo thinks they are.
City = infrastructure
Provide these people (and all of us) with an alternative ISP that's paid for by taxpayer dollars. This instantly lowers these business's costs and invites them onto a free and equitable internet.
Then, if they need to know what to do with this new found free and equitable internet access, you provide them with education on how to use the tools other people are making available. You subsidize certain ones if you feel they are "best-in-class" or you just subsidize online retail in general.
The city should stay out at the infrastructure level and support its use. The user should deal with the complications of the services/software. Teach us to sell fish, don't sell our fish for us.