A California law that went into effect on January 1 led to the removal of tens of thousands of food delivery app restaurants, such as Uber Eats, DoorDash, Postmates and SF-based Caviar. The law, which was passed last fall, requires applications to offer delivery only to restaurants with which they have a direct partnership and to remove listings of restaurants with which they do not have an existing contract.
The legislation was born out of a scandal that started in the bay area: in January 2020, Pim Techamuanvivit, the owner of Michelin-starred Thai restaurant Kin Khao in San Francisco, was surprised to find that delivery services, including GrubHub, seamless, DoorDash. and Yelp Delivery Platform (also GrubHub, since they bought Eat 24 from Yelp, then closed it) were supposedly offering food from their menu for delivery without their permission.
His furious tweets on the subject shed new light on a common practice for most delivery apps, whereby companies are known to be adding restaurants without their permission, an effort to attract customers by appearing to offer deliveries from more restaurants than their competitors. . Politics has been a thorn in the side for many restaurant owners, who say that apps often publish inaccurate or outdated menus … and when the restaurant refuses to serve food from an old menu, apps put the blame on restaurants instead of taking on themselves.
“As far as the customer knows, it’s my fault,” Eli’s Mile High Club owner Billy Joe Agan told Eater SF when his Oakland bar was surprised by delivery drivers looking for orders for a last-used menu. in 2016. “A customer places an order, they assume it is done as part of a partnership between Eli’s and an app, and then I say no. Then, the delivery app says to the customer ‘They declined your order’ and I’m the idiot, although I never agreed to use any of those apps. “
In February 2020, the issue attracted the attention of California State Representative Lorena Gonzalez of San Diego, who proposed Bill 2149, a law that would block listings of non-consensual applications. The legislation passed the approval process and was passed into law by Governor Gavin Newsom in September. Its final language states that to list a restaurant on its platform, the online food delivery application company must have a contract with the restaurant “expressly authorizing the food delivery platform to take orders and deliver meals prepared by the food unit”
The law, which came into force on the first day of 2021, can have a major impact on the options available to customers using these applications – as well as on the applications themselves. According Wall Street Journalin September, Uber-owned Postmates, for example, boasted 700,000 restaurants in its app. Of these, only 115 thousand had a partnership contract with the app. In California alone, Postmates said in September, 40,000 of the restaurants they list would have to be converted into paid partnerships or removed.
Other delivery apps, like Doordash, are better prepared for the new law. According WSJ, more than 95% of its businesses in the third quarter came from restaurants with which it already had partnerships. Even so, the news of the California law caused a drop in the stock price, which saw an all-time low of $ 135.38, after an increase of $ 195.50.