In an effort to protect restaurants from potentially being exploited by delivery apps, Gov. Gavin Newsom signed a bill into law Thursday that requires delivery companies to have an agreement in place with a restaurant before they can take their food to customers.
AB2149, or the Fair Food Delivery Act, which was authored by Assemblywoman Lorena Gonzalez, D-San Diego, is a response to a growing number of restaurant owners throughout the state who have seen their menus pop up on delivery apps they never agreed to partner with. Bay Area chefs have publicly bemoaned this situation and said it can hurt both a restaurant’s reputation and finances.
“When Uber Eats, DoorDash and other gig companies operate under their own rules, businesses and consumers are harmed,” Gonzalez said in a statement, adding that the bill is a stance “against massive overreach by delivery app companies.”
Delivery apps have become fixtures of dining during the pandemic as restaurants try to survive on delivery and takeout orders due to the coronavirus; only recently has indoor dining reopened in much of the Bay Area, at limited capacity.
Postmates, headquartered in San Francisco, says the law could “cut off a lifeline” for many California restaurants.
The company, which is being purchased by Uber, said it “almost entirely” works with restaurants through formal agreements but has let businesses test its platform at no cost before discussing an agreement, which is a step it described as a “crucial benefit” to financially struggling restaurants.
“Upending access to services for thousands of local restaurants; cutting off access to $100 million in revenue for local business realized in 2020, and wiping out millions in sales tax for the state’s coffers, is a classic example of how well-intentioned lawmaking can go terribly wrong,” Postmates said.
San Francisco chef Pim Techamuanvivit, owner of the Michelin-starred Thai restaurant Kin Khao in Union Square and a second location in Dogpatch, drew attention to the issue before the pandemic. In January she took to Twitter to describe how Grubhub had listed her restaurant — which at the time didn’t offer takeout or delivery — without her permission. Due to the pandemic, her businesses now offer both services, and she sees the legislation as a way to help restaurants preserve their reputations.
“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,” Techamuanvivit said. “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.”
Grubhub said in a statement that it had “long advocated that partnering with restaurants is the best way to create a positive experience for restaurants, diners and drivers. … 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.”
Laurie Thomas, executive director of the Golden Gate Restaurant association and a local restaurateur, said the bill will help the struggling industry.
“It’s a nightmare when an order is placed on an app for something we don’t have, because the menu wasn’t from us, and we just end up having to comp the whole thing,” she said. “This bill is one that’s really important for the restaurants trying to survive.”