Small Restaurants Exploited by Delivery Apps Protected Under New Legislation by Lorena Gonzalez

Tuesday, February 11, 2020

AB 2149 Helps Restaurants Avoid Being Undercut by Delivery Apps

SACRAMENTO – (Tuesday, Feb. 11, 2020) – New legislation announced today by California State Assemblywoman Lorena Gonzalez (D-San Diego) will protect restaurants from being undercut by food delivery platforms, such as DoorDash, Grub Hub, Postmates and Uber Eats, that make it impossible to build strong customer relationships. 

“We need to level the playing field for mom-and-pop restaurants that are being taken advantage of by big tech,” Assemblywoman Gonzalez said. “Restaurants shouldn’t fear losing their customers when they don’t agree to the conditions of some multi-million dollar food delivery app. This bill will put the power back in the hands of small business owners in California.”

When food is ordered on a delivery app, restaurants are not provided with information on where their customer is located or how to contact them. Assembly Bill 2149, known as the Fair Food Delivery Act, would strengthen the relationship restaurants have with their customers by requiring food delivery apps to share certain information about customers, including location and email address. AB 2149 would also prohibit restaurants from being offered on delivery apps without a prior agreement in place.

“One-on-one engagement—hearing feedback from customers, being responsive to complaints, addressing the quality of service and delivery—it’s critical to ensuring a good experience,” said Greg Dulan, owner of Dulan’s Soul Food Kitchen and Hotville Chicken in Los Angeles. “It is hard to do that if we don’t know who our customers are—this bill will fix that.”

Third-party delivery is a logistical nightmare for kitchen operations. Delivery app service workers pick up food from several restaurants at a time, which means there is no guarantee on when the food will reach the consumer. If the order takes longer than expected, the food quality diminishes and could even become unsafe to eat—tarnishing a restaurant's reputation with that customer forever. 

Because delivery apps do not provide data to restaurants on who has ordered what food, restaurants are left with no way to follow-up on any situation. These big tech giants may even use this customer data to undercut small restaurants and direct customers to competing businesses or ghost kitchens operated by the platform itself.

“Technology giants aggressively entering the foodservice space—whether deliberately or not—are eroding the customer’s relationship with the restaurant,” said California Restaurant Association CEO and President, Jot Condie. “The tech platforms who are delivering the food and the restaurants who are preparing it both have a responsibility for the customers’ experience and satisfaction. If we are going to be partners in this, we both need to be part of that communication channel.”

Food delivery apps take as much as 30 percent of sales from restaurants, 60 percent of which in California are owned by people of color. As the delivery industry continues to rapidly grow, AB 2149 will provide more fairness to small restaurants doing businesses with big tech. 

For a list of restaurants available for media inquiries, contact Sharokina Shams: sshams@calrest.org 

For questions on AB 2149 or to schedule an interview with Assemblywoman Gonzalez, contact Sami Gallegos: Samantha.Gallegos@asm.ca.gov