vitality of our neighborhoods. i have had a small business in the richmond for a long time, a couple of small businesses. i have seen the community grow around spaces and around just making a physical space for people to gather. i feel like that is something we just need more of. as i watch restaurants struggle and places of business where people can physically come together and struggle, it is making me very concerned about our city. i understand that we are working really hard and sometimes at the end of the day we just want food in our own home and that is totally fair as well. i have been giving this whole thing so much thought, but i

want to thank everybody for coming today and bringing up so many like concrete points that the commission can really take back and put together real recommendations around, and i also think you brought up so many things that were so good. like really meat i didn't thinks to talk about. i just want to encourage that hopefully i see that after owning a business for so many years that we are kind of in a really good spot with good conversations and nice collaborative work as merchants and business owners. this gives me a lot of hope that everybody here came so prepared, and so passionate about what you do and so willing to share.

that wasn't necessarily the case before. i think people were much more protective of their data, of their experience. we all wanted to smile and go business is great. even when times were tough we were unwilling to share vulnerabilities. right now we have an opportunity to collaborate as business owners and community members to say this is enough of this. we need more of these things. i really appreciate everybody shared so openly with us and everybody else all of your experiences. thank you. >> you know, one thing many of you this might be your first small business commission hearing. one thing that is important to understand. our role is primarily advisory. we cannot write legislation, we cannot pass legislation. in fact, this hearing itself is

reactive. a supervisor is considering introducing legislation. if we wait for the legislation to be introduced, we are behind the 8 ball and we are now trying to unwinds unwise policy and advocate good policy. we learned if there is legislation pending. it is wise to get in front of it and have a hearing and educate us. as a commission we can't know everything there is to know about the restaurant industry. these hearings are critically important in raising our awareness of the issues. i probably learned 100 different things from the testimony today. there is an old saw about

government. we are talking about the restaurant industry. if you are not at the table you are probably on the menu. just by being here, you have allowed yourself to participate in the process, and that is being ingested into us, and we will provide the best guidance that we possibly can to the supervisors and mayor so the policy that eventually results is thoughtful, considered, and you know like the physician first do no harm. i think from our perspective as commission we will tread cautiously into this area and try to have a minimal hand. i did want to call out commissioner ortiz for bringing up equity issues.

i think that gets lost a lot in these conversations. i think that is something that the tech community has struggled to keep up with, which is how do we make opportunities for folks of all races and all socioeconomic backgrounds. speaking of somebody that was on step zero for many, many years. getting from step zero to step one is the hardest step. most small -- you know, as we heard from laurie, 52% of our retail sector is restaurants. that means 52% of the folks getting the first start in business, learning the first thing about business is happening at the restaurant.

that is their first experience with customer service. you know, i think we need to pay very careful attention to that equity lens and make sure we hold ourselves accountable with whatever guidance we give at the end. in hearings we come up with resolutions to introduce. in this case we have very senior and experienced commissioners that i would want to get their input before moving forward with any formal recommendation. i am not going to recommend, of course, any commissioner can introduce a motion if they feel differently. i am not going to recommend we introduce any formal recommendations at this time and reserve that. i believe we have time, correct? >> yes. i think what will be hel helpfur

staff. from the conversations i heard issues. >> i will list those. >> i think what we need for charity for timing is the next commission meeting is march 9th. there is that ability for the commission to take action on a specific set of recommendations. if you want to be able to have a very specific set of recommendations even if they are still at 1,000-foot level for us to communicate at supervisor safai's hearing on monday and that hearing is march 12th. it would be helpful to give some direction of which then dominica and i can work. >> we can start to do that now.

the first thing i will say at the top level what i think we heard over and over again is that the top line issue here wasn't necessarily delivery services or ghost kitchens per se but this whole environment that has settled in to make it extremely difficult to operate as a restaurant. it is driving businesses towards operating ghost kitchens and what have you. i am a little worried about the prescription not actually being the cure for the disease. >> i think we can walk and chew gum. we make sure this is not a silver bullet and never get the eye off the eight ball. there are a lot of issues. we are providing specific recommendations to this one. i don' don't want to lose sitesf that. >> again, legislators, you

caused this. your legislation, you don't run businesses, you don't make payroll. this is what happens, 10 years, this is the result. the virtual ghost kitchens. they need to post scorecards online on the site, not up to the consumer to go and investigate the department of public health. they have to post like a brick and mortar. we should also have a special use for this type of use now. they are getting bye-by getting. local guys that they trigger if they are successful. >> i think when we talk about level playing field, if you love chipotle and there are a set of things that prevent it from coming to the valley.

if it is in this format that is something that could long-term hurt. we need to support the local restaurants is one thing to not do that formula retail is skirting by the rule. >> one thinone thing to considee evidence happening? >> the planning department said it can happen in the public hearing. there are people in companies watching or here present. >> my point is from my perspective when you craft legislation to address issues that haven't actually happened or become a problem you sometimes wind up creating problems where there was no problem. i am encouraging a certain degree. we should be responding to. >> i want to be proactive.

i want it before it happens. sorry, we let chipotle. we see it coming. you know that is what they are going to do. there is a loophole. >> where i am with you and this gets addressed is in the tension between catering versus retail, right? you heard me say. it seems like we should have a new category, right? to my perspective what is the material difference between a takeout delivery place to walk up and order food and go away versus you know i can order something on the app? isn't that retail? i am still buying from the kitchen? >> for me the catering definition didn't bother me as much. there are a lot of strict guide

lines about the catering kitchens. the ones that have got in they have used limited restaurant. i actually as someone who went through the planning process, i am hesitant to create whole new definitions. having these i do not see the evidence why that is mess since they are del-- that is necessary necessary. it is important for whatever definition is needed. it is different from formula retail. it is two different things. i don't think formula retail should operate out of ghost kitchens. it creates long fair advantages to mom and pop kitchens. >> there is a formula retail

happening right now. it hasn't exploded but it is happening. that is not fair. >> i guess formula retail, just gaming this out, right? that is a land use provision, right? 11 retail units or more. you know, there is a conditional use aspect to it. you have to get a c .u. if you are formula retail to open up a business. as planning testified, caters is permitted. >> he said it depends where you are. >> in certain districts like per and i forget the other one. it is permitted. you know, to shoe horn, i am far from the expert on this, right?

to shoe horn formula retail into something that is principally permitted, caters is principally permitted, formula retail is conditional use. >> formula retail is not permitted in a lot of neighborhood commercial districts. some allow it conditionally which is a killer because no one is going to approve it. >> it always triggers conditional use, formula retail. we know that. if we don't agree. i have my own thoughts on that separate. whatever is the legislation today should apply to everybody else. play even playing field. that is all. >> i don't be know where i fall on this. i am still sort of assessing it out. with respect to formula retail we can all agree that if a

chipotle or burger king started operating a delivery service, you know, that would probably be materially bad for local business, right? how do we feel? just to finish my thought. how about somebody like ike's or a local business that is triggered under these rules. they might have only one location in the city because there are 10 elsewhere in the world. i called the city attorney to ask about this under the commerce clause of the constitution you want say only local businesses are excepted from the rule. we have to be careful. my accident with 15 -- my business with 15 locations. i don't want to open another one in san francisco, if i did i could not without going through the c .u. process.

>> i think, you know, we have ben from oewd who has done a lot of work and was very instrumental in the mayor and former supervisor vallie brown streamlining legislation, i don't know if the commission is able to get to the very specific nuancing of formula retail, but to say this is one area to look at and to take the general principals of what the current formula retail policy is and look how it overlays because if there is an application to it, even as the formula retail exists, it still may narrow the window if it gets applied to these catering facilities. if it is applied it can narrow the window of the land use of them being able to be. i think it is important for us

to hear the direction of you that this is one area that needs to be looked at and brought together with oewd and the planning department to look at this and sort of look at all of the zoning codes and locations and where things can and can't be, and then, you know, if it develops into legislation or develops into the planning department needs to be more rigorous in the questions when applications come through, we can come back. that is the direction you can make to the city agencies and for us to then report to the supervisors that this is an area that the commission thinks needs to be looked at and addressed? we can take your direction where to look and come back before you later on when we spent, you

know, weeks looking at this and refining it. >> commissioner huie. >> i want to say the big take away was and then my mother specific recommendation -- more specific recommendations. i totally agree we need to solve all problems in the neighborhoods and look at why we are struggling so hard to like just maintain a business. just to open a store, restaurant. why is it so difficult in san francisco? that is like my number one thing. i think that is going to be for me, at least, that is why i am here. that is why i am on the commission. my mother specific things -- my more specific things are opt-in and out. possible predatory repractices.

literally as a business owner you do everything. you are doing every little tiny thing. i don't have time to police whether there is a new delivery app with my name on it. that shouldn't happen. i can't police the internet wherever my name shows up. i mean these aren't the only companies going to be in business like two or three years from now. i think the ability to opt into a program is giving the business much more, i guess, agency over their own futures. >> i agree, by the way. >> there is a lot of consensus. there is one thing we didn't talk about very much during this hearing. it has been brought up by a couple different restaurants, which is the element of end customer data.

when a tell delivery service for instance the scorecard. i think that is a really solid consumer information point. i think that there is another solid point we should know the true distance of the food preparation from your location. that is like from an environmental perspective some sound public policy behind that. what we didn't talk about was the right to customer data. i think, you know, if you have customers who are eating your food but you don't have any ability to know who those customers are, you don't have ability other than dashboard metrics, is there a public policy component there?

is that something to look at. >> i think right now we are compiling our list. that is definitely fair for us to discuss. the other thing i was going to say was i totally agree with having the food rating system somewhere servicesible. if i am ordering food or choosing between restaurants. i shouldn't go offer customer reviews or star rating. i should have a health rating code to apply to all types of food sources. whatever that may be, i feel like that should be much more transparent and easy to get to. it sounds like there are commissaries that are self-regulating. 23 plus kitchens. that type of data should be easy for a consumer to achieve.

the other piece that i think is also the delivery apps. to me the most concerning part is the delivery apps in terms of having no real oversight with like they don't really fall under planning. they don't fall under anything. they aren't falling under the department of public health. if this is such a large component how we get food today, i think i should know like how my food is getting to me. i feel like that is going to become a larger and larger piece of public health picture. i would like to know, you know, how it is getting to me. i feel that should be part of their responsibility. there is so little responsibility on their shoulders besides creating technology and software.

they need some real world accountability. i think that is part of our commission's goal is how to create account ability with this virtual world that we are living in because at this point there is none. >> let me see if i can summarize. >> i have to go soon as well. >> we are going to summarize and close. director, i think the issues to explore at the next meeting the scorecard, whether or not these services should be required to have health scorecards, whether that unfairly advantages virtual

kitchens over brick and mortar, opt-in and opt out on the delivery service, whether ghost kitchens should be included in formula retail provisions, which obviously brick and mortar are. that is another area where ghost kitchens perhaps have an unfair advantage. from the delivery perspective, whether brick and mortar restaurants should have access to data about customers, if so, how much. we want to very carefully look through the equity lens. are we considering what this looks like from different socioeconomic levels from somebody starting a brand-new business for somebody who maybe doesn't speak english as first language, how does this

landscape look to them? is there anyone i forgot? i feel like i forgot one. >> my only one was creating a planning code such that it would be to make sure that if it is true we do not want these kinds of businesses in the neighborhood commercial district there is a code framework to make sure that doesn't happen. >> right. does planning have a role to play in the proliferation of ghost kitchens versus brick and mortar. is that what you are driving at. >> it seems like they do. it is whether or not there are hoop holes. >> there is a secondary question is how. what is the determination? what is the basis for the determinations. >> then i do want to ask you do you also because much was just brought up in public comment is

the city's current regulatory environment. do you want to be able to -- do you want to make a note about how that intersects with the new industry models because i think, you know, we have heard the economic impact from our brick and mortars in relationship to existing regulation. i felt like from some of you there are strong statements in relationship to that. >> at the very least maybe not direction but just a document that prior legislation is what is bred these business models, and to coast constantly in our mind we do not want to legislate unintends consequences for small

businesses. if this is the way to compete because of past legislation. we want a fair chance. we don't want them to be in the ring with mike tyson with two hands behind their back. that spirit should be constantly mentioned at all levels. >> we should make special note when we formulate our resolution or guidance that we make it explicitly clear it is the regulatory environment that made it possible for this current situation. >> and happy to do that. i do have a concern that if we keep it that broad level it doesn't give specific direction in terms of what the legislature can do or identify. >> it is a preamble to more detailed recommendations. >> if i may, i think we did hear a short list, litany of specific

things, increases of payroll which the city is involved in, increased cost of doing business which is city is involved in terms of healthcare and housing. we should preface any recommendations with the short list of things that have fallen on the shoulders of small business owners. it was well said and we should definitely note that and not keep it too broad. >> also include the expense of opening. >> the cost of permits and fees to open. >> it is like it should be boilerplate language at the beginning of every document. >> it was obvious that it should be mentioned specifically. >> that is part of it. it is so obvious to us and seeing the forest through the

trees at the policymaker level. >> okay. anything else? are we done? anything special i have to do? >> i just have one other question in relationship to this. not fully sort of indirectly brought up but i know that commissioner ortiz mentioned this numerous times. a recommendation or the question was what mechanisms the city has set up to track and evaluate the economic implications both ways and so a question to the commission is that a recommendation you would like to see on the list that the city needs to track. that didn't happen like with the burgeoning of uber or air b and b. we have the ability to put those

metrics in place now. is that something? >> this is new, we have some kind of framework to evaluate it, but it is not really my department's full-time responsibility to figure this out. >> that is the controller and city chief economist. >> maybe we should put in there. >> hold on. i think that we should discuss it at the next hearing. my caveat here is, for example, to take uber. if we had done an analysis in 2003 when uber came out. it would have been wrong. my concern here is that we take up city staff hours and you know we are spending budget on items

that we don't have enough data to begin to analyze the implications unless you disagree and think the data is there. >> i would recommend not trying to foresee the future in terms of the data. i would like to see milestones that we would like to see data so we can evaluate and figure out what those data points would be to examine the success or, you know, nonsuccess of something. >> i mean i am disagreeing. a lot of information is anecdotal. bad actors, restaurant owners talking about people showing up saying where is the delivery? that is good information but a lot of it we heard today is triggering what could be an

issue. it doesn't seem s.f.m.t.a.'s answers indicated there is a little bit of data. it is important to understand where we are right now. >> my argument wasn't against data. i love data. >> i think maybe how i said it got misinterpreted is to encourage the city to start establishing not projecting what the economics is but start setting update take metrics so that two years from now we can say how did these policy choices affect? did we swing too far? i think about, you know, the fact that when i thin think aboe mobile ghost kitchen coming in. they have done economic analysis about the customer base and the money to be made here. we are not tracking that as a city to understand our policy

implications. they directly relate to our policy implications. i just feel like i guess not what i feel like . >> you are right. i misunderstood. i thought you were suggesting the generation of report. it sounds like you are saying setting up tracking data points or mechanisms. am i characterizing that correctly? >> to evaluate the growth, impacts, if we are making policy decisions, are those policy decisions being, are they meeting our economic, you know, health and well-being that we want to balance as best we can. >> i think like critical to that question is so often the case what are we measuring? what are the data points? i can't say that i can have a

whole lot of confidence that i know precisely the data points that we should be measuring. i agree there are likely data points and we all would collectively benefit from measuring them. >> i want to know how cloud kitchen, virtual kitchen was, whatever you call them in coordination with the delivery apps are affecting small businesses. i want the answer to that question. we are advocating for them. maybe i misunderstand. it seems that is a question the city has tools to answer. it behooves us to get that answer. >> let's explore that. number of employees, what meals are served, and then we also have to sort of consider to what

point are they not replacing restaurants and just replacing cooked at home? >> what is helpful was sf m.t.a. did a baby survey of 32 merchants, what networks, when do the cure yours pick up, deliveries, that kind of thing. >> i got a quick aside. to that list s.f.m.t.a. was not here so we didn't have a chance to ask about double parking and the traffic. can you add that to the list to consider? >> i think this would be a nice thing to take on march 9th as we continue this. >> bring us home, cynthia. >> the general direction the city needs to measure the economics would be fine for us to take to the board of

supervisors, getting into the detail could be an ongoing conversation. a good conversation to have with oewd. >> can we end it now? >> it is on your shoulders. >> it was up to me the whole time. >> next item please. >> sfgovtv please show the office of small business slide. >> it is our custom to begin and end each meeting with the reminder the office of small business is the only place to start your new business in san francisco and best place to get answers to questions about doing business in san francisco. it should be your first stop. find us online or in person at city hall. best of all, all services are free of charge. small business commission is official public forum to voice opinions and concerns about policies for the economic

vitality of small businesses in san francisco. if you need assistance start here at the office of small business. thank you. >> item three adjournment. action item. >> i move. >> second. >> in favor. >> the meeting is adjourned at 4:18 p.m.

shop and dine on the 49 promotes local businesses and challenges residents to do shopping and dining within the 49 square miles of san francisco by supporting local services within neighborhood. we help san francisco remain unique, successful and vibrant. where will you shop and dine in the 49? san francisco owes the charm to the unique character of the neighborhood comer hall district. each corridor has its own personality. our neighborhoods are the engine of the city. >> you are putting money and support back to the community you live in and you are helping small businesses grow. >> it is more environmentally friendly. >> shopping local is very important. i have had relationships with my

local growers for 30 years. by shopping here and supporting us locally, you are also supporting the growers of the flowers, they are fresh and they have a price point that is not imported. it is really good for everybody. >> shopping locally is crucial. without that support, small business can't survive, and if we lose small business, that diversity goes away, and, you know, it would be a shame to see that become a thing of the past. >> it is important to dine and shop locally. it allows us to maintain traditions. it makes the neighborhood. >> i think san francisco should

shop local as much as they can. the retail marketplace is changes. we are trying to have people on the floor who can talk to you and help you with products you are interested in buying, and help you with exploration to try things you have never had before. >> the fish business, you think it is a piece of fish and fisherman. there are a lot of people working in the fish business, between wholesalers and fishermen and bait and tackle. at the retail end, we about a lot of people and it is good for everybody. >> shopping and dining locally is so important to the community because it brings a tighter fabric to the community and allows the business owners to thrive in the community. we see more small businesses going away.

we need to shop locally to keep the small business alive in san francisco. >> shop and dine in the 49 is a cool initiative. you can see the banners in the streets around town. it is great. anything that can showcase and legitimize small businesses is a wonderful thing. >> it's great to see everyone kind of get together and prove, that you know, building our culture is something that can be reckoned with. >> i am desi, chair of economic

development for soma filipinos. so that -- [ inaudible ] know that soma filipino exists, and it's also our economic platform, so we can start to build filipino businesses so we can start to build the cultural district. >> i studied the bok chase choy her achbl heritage, and i discovered this awesome bok choy. working at i-market is amazing. you've got all these amazing people coming out here to share

one culture. >> when i heard that there was a market with, like, a lot of filipino food, it was like oh, wow, that's the closest thing i've got to home, so, like, i'm going to try everything. >> fried rice, and wings, and three different cliefz sliders. i haven't tried the adobe yet, but just smelling it yet brings back home and a ton of memories. >> the binca is made out of different ingredients, including cheese. but here, we put a twist on it. why not have nutella, rocky road, we have blue berry. we're not just limiting it to just the classic with salted egg and cheese.

>> we try to cook food that you don't normally find from filipino food vendors, like the lichon, for example. it's something that it took years to come up with, to perfect, to get the skin just right, the flavor, and it's one of our most popular dishes, and people love it. this, it's kind of me trying to chase a dream that i had for a long time. when i got tired of the corporate world, i decided that i wanted to give it a try and see if people would actually like our food. i think it's a wonderful opportunity for the filipino culture to shine. everybody keeps saying filipino food is the next big thing. i think it's already big, and to have all of us here

together, it's just -- it just blows my mind sometimes that there's so many of us bringing -- bringing filipino food to the city finally. >> i'm alex, the owner of the lumpia company. the food that i create is basically the filipino-american experience. i wasn't a chef to start with, but i literally love lumpia, but my food is my favorite foods i like to eat, put into my favorite filipino foods, put together. it's not based off of recipes i learned from my mom. maybe i learned the rolling technique from my mom, but the different things that i put in are just the different things that i like, and i like to think that i have good taste. well, the very first lumpia that i came out with that