Delivery Apps in California Will Soon Be Required to Have Permission from Restaurants

Some delivery services have been adding restaurants without consent. A new California law will end that practice.

You've likely served as a third-party seller before. Maybe you sold furniture at a garage sale? Or maybe you sold old clothes on eBay? But not everything can legally be sold through a middleman. For instance, you need a permit to sell alcohol at your garage sale. And you can't sell your old guns on eBay. Starting next year, in California, these kinds of restrictions will apply to food, too: Third-party delivery services like DoorDash, Grubhub, and Uber Eats will need approval from restaurants to work on their behalf.

On Thursday, California Governor Gavin Newsom signed the "Fair Food Delivery Act," new regulations that will officially take effect on January 1, 2021. The law will require food delivery platforms to obtain an agreement from restaurants "expressly authorizing" them to take orders and deliver meals. In defending the change, the bill points out that California law already "generally requires various businesses that prepare or otherwise provide food to the public to comply with uniform health and sanitation standards."

Gloved and Masked man in Restaurant Kitchen Preparing Food for Delivery During Covid-19 Pandemic
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The new rules were deemed necessary after services began adding restaurant to their platforms without notifying them—sometimes even against the establishments' wishes—under the presumption that they were essentially operating as an intermediary for the customers, placing orders and picking them up on their behalf. But restaurant owners argued that these delivery platforms could undermine their business in all sorts of ways—providing incorrect menus, listing different prices, failing to ensure the quality of the food upon delivery, or even breaking health guidelines and making customers sick—all of which could hurt a restaurant's reputation. Both chains like In-N-Out and Michelin-starred chefs like Pim Techamuanvivit have spoken out against the practice.

"When Uber Eats, DoorDash and other gig companies operate under their own rules, businesses and consumers are harmed," State Assemblywoman Lorena Gonzalez, who introduced the bill, said last week. "I'm grateful to see the Legislature and governor stand up for small and family-owned businesses against massive overreach by delivery app companies."

Speaking to the San Francisco Chronicle, Techamuanvivit said passing these new rules is especially important in the current climate where restaurants are facing enough headaches due to the pandemic. "When these apps would just pull our menu from somewhere without letting us know, customers might order something that we don't offer anymore, especially if the restaurant's menu is seasonal," she told the paper. "Customers don't blame the delivery company when they get told we don't have something, they blame the restaurant. That mistake isn't something we can take right now."

Meanwhile, Nation's Restaurant News reports that DoorDash and Grubhub—both of which have used this tactic of adding restaurants without consent—have said they would follow the law. "We intend to fully comply with this new rule once enacted and will continue to demonstrate the value of DoorDash and the variety of options we provide to support our merchant partners," the company was quoted as saying.

Grubhub also emphasized their preference for partnerships, taking a jab at the competition in the process. "We've long advocated that partnering with restaurants is the best way to create a positive experience for restaurants, diners and drivers," the company explained in a statement. "Some companies built their businesses by listing non-partnered restaurants on their platforms and delivering food without an agreement so they could expand their restaurant supply, but this strategy fails to drive long-term value in the food delivery industry. We strongly support this effort in California to level the playing field, help restaurants better control where and how their food is delivered, bring lower fees to diners, and improve food delivery operations for everyone involved."

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