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A new law just came into effect in California on Jan. 1 that prohibits food delivery apps from listing restaurants among their offerings without first signing a contract with those restaurants.
It might seem obvious to assume that all of the restaurants that can be found on DoorDash, Caviar, Grubhub, etc. have agreements with the apps to sell their food there. Not so! At least until the passage of a new California legislature last year, Grubhub and its sister site Seamless used to list restaurants and their menus on their websites and apps in order to make it seem like they had a wider choice than competing applications. In some cases, the app would simply act as a middleman (as Postmates has long done), ordering restaurant takeout, sending a driver to pick up the legitimate takeout order and deliver it, and then pocketing all the charges, but without any. contract with the restaurant.
And while this story was bubbling up elsewhere, it exploded in San Francisco last February when Michelin-starred Thai spot Kin Khao – which had never offered take-out or delivery before the pandemic began – received a phone call from a Grubhub customer who was impatient for a delivery note.
In this case, it turned out that there was also a confusion between Kin Khao and Thai “ghost cuisine” – a commissioner’s kitchen preparing dishes only for delivery, without a traditional restaurant – with a similar name, Happy. Khao, had his menu mislabeled by Grubhub. But the story, and the online rage of Kin Khao owner Pim Techamuanvivit, has led to more attention being paid to the practice of non-consensual menu listing and restaurants.
As Eater reports, other Bay Area restaurants have fallen victim – as in the case of Eli’s Mile High Club in Oakland, where a long-outdated menu displayed on an app resulted in orders that had to be canceled, and the app blamed the restaurant rather than blaming themselves.
Grubhub responded to the scandal by saying that it was simply an “initiative” to include more “high demand” restaurants among their offerings, saying: “Kin Khao was one of those restaurants that we have added to our market for this initiative to include more restaurants on our platform, and unfortunately we have referenced the wrong menu for this restaurant. “
San Diego-based California State Congresswoman Lorena Gonzalez then proposed Assembly Bill 2149, which was enacted in September, banning the practice of such non-consensual lists and requiring applications to interact directly with restaurants before including them in their offers.
This means that thousands of restaurants are likely to disappear from Uber-owned Postmates, DoorDash and others – apparently out of 700,000 restaurants on 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 was offering delivery to in the third quarter of 2020.
The selection will therefore narrow on most applications, and not just in California. According to the Journal, Minneapolis has already passed a similar restaurant consent ordinance, as have other cities, including Philadelphia, Denver and Tucson, Arizona. New York State appears to be the next state to pass a statewide law like California’s this year.
But come on … as “growth strategies” evolve, that was a dubious question, and it’s far from the only way delivery apps have proven to be harmful pests in an industry that doesn’t ‘needs more problems right now.
Related: San Francisco caps commissions for food delivery apps at 15%
Photo: Kai Pilger
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