A new law came into effect in California on January 1 that prohibits food delivery apps from listing restaurants among their offerings without expressly contracting with those restaurants first.
It may seem an obvious thing to assume that all restaurants found on DoorDash, Caviar, Grubhub and others have agreements with the apps so that their food is sold there. Not so! At least until a new one passed the California legislature last year, Grubhub and its sister site Seamless had the practice of listing restaurants and their menus on their websites and apps to look like they had a wider selection than competing apps. . In some cases, the app would simply serve as an intermediary (as Postmates have been for a long time), ordering takeaway food at the restaurant, sending a driver to retrieve the legitimate takeaway order and delivering it, and then pocketing any fees, but without any contract with the restaurant.
And while that story was bubbling up elsewhere, it exploded in San Francisco last February when Michelin-starred Thai restaurant Kin Khao – which had never offered takeout or delivery until the pandemic began – got a call from a customer in the Grubhub impatient with a delivery request.
In this case, it turned out that there was also some confusion between Kin Khao and a Thai “ghost kitchen” – a kitchen serving food only for delivery, without a brick and mortar restaurant – with a similar name, Happy Khao, had its menu mislabeled by Grubhub. But the history and online anger of Kin Khao’s owner, Pim Techamuanvivit, has led to more attention being paid to the practice of non-consensual menus and restaurant lists.
As Eater reports, other restaurants in the bay area were victims – as in the case of the Eli’s Mile High Club in Oakland, where a very outdated menu posted on an app caused orders to be placed and had to be canceled, and the app placed blame it on the restaurant instead of taking the blame.
Grubhub responded to the scandal by saying that this was simply an “initiative” to include more “high demand” restaurants among its offerings, saying, “Kin Khao was one of those restaurants that we added to our market for this initiative to include more restaurants on our platform. and, unfortunately, we mentioned the wrong menu for this restaurant. “
State Representative Lorena Gonzalez, based in San Diego, then proposed bill 2149, which was enacted in September, banning the practice of these non-consensual listings and forcing applications to directly engage with restaurants before including them in their offerings. .
This means that thousands of restaurants are likely to disappear from Postmates, DoorDash and others owned by Uber – apparently out of the 700,000 restaurants in the Postmates app, only 115,000 had partnership contracts with the app, according to the Wall Street Journal. And Grubhub still had no contracts with about 55,000 of the 300,000 restaurants it offered delivery from the third quarter of 2020.
Selection will therefore be more restricted in most applications, and not just in California. According to the Journal, Minneapolis has already passed a similar law on consent for restaurants, as well as other cities, including Philadelphia, Denver and Tucson, Arizona. New York State appears to be the next state to pass a state law like California’s later this year.
But come on … as far as “growth strategies” are concerned, this was a dubious strategy and it is far from the only way that delivery apps have proven to be harmful parasites in an industry that doesn’t need any more problems now.
Related: San Francisco Limits Commissions for Food Delivery Applications by 15%
Photo: Kai Pilger