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It’s no secret that due to the coronavirus pandemic, food delivery companies like Postmates, DoorDash, and Uber Eats grew immensely in popularity and revenue. The way in which app-based services usually work is by having contracts with individual eateries or restaurants to deliver their food, but this isn’t always the case.
As KPBS reported this month, some restaurant owners don’t even know food delivery companies list their businesses. Jeff Rossman, owner of a San Diego restaurant, shared his story to the media outlet: “The [food delivery] person that picked it up said, ‘Oh yeah, we work with Postmates,’ so I did some investigation and found we’re not on Postmates. How are they selling our food?” As it turned out, Postmates had listed Rossman’s restaurant without his permission over a year ago.
Customers on apps like DoorDash can currently order from “non-partner” merchants, which are restaurants that do not have agreements with the delivery app. If a restaurant wants to be removed from the app, the process could take up to 72 hours, but some have reportedly said it takes months.
The California Restaurant Association said this has been an ongoing issue throughout the entire state, and it’s particularly hitting small businesses pretty hard.
Reportedly, nearly 58% of all restaurant delivery sales in the U.S. are being made on these apps, and it’s expected to reach 70% by 2022. In turn, this leaves many restaurants in a vulnerable position, feeling forced to agree to any term the apps set, including charging the restaurants unfair commissions on orders.
To somewhat remedy this, Assembly member Lorena Gonzalez (D-San Diego) authored AB 2149, called the Fair Food Delivery Act, which would require the food delivery services to only list a restaurant on their platform with permission from the restaurant owner and to share certain information about who is ordering. The San Diego assembly member also authored AB5.
Currently, all information about people placing orders stays with the app and is not shared with the restaurant. That could mean that a restaurant doesn’t learn valuable information that could lead to the growth of their business, like what neighborhoods their loyal customers live in, or how well the packaging they use to box up food holds up until it’s delivered to the customer’s door.
The Fair Food Delivery Act has already passed the State Assembly and a Senate committee. It is now on its way for a full Senate floor vote.