Gov. Newsom Signs Bill Regulating Food Delivery Apps

Earlier this week, Governor Gavin Newsom sign a bill into law enacting the Fair Food Delivery Act of 2020, prohibiting food delivery apps from arranging deliveries without getting permission from the restaurant or store to take orders from there.

Updates to food delivery services in California

Assembly Bill 2149, authored by Assemblywoman Lorena Gonzalez (D-San Diego), also specifically identifies “food delivery platforms” as online-based businesses that act as a middleman deliverer between restaurants and customers that also arrange the delivery of the order. Under AB 2149, these companies, which covers companies in California such as DoorDash, Grub Hub, Postmates, and Uber Eats, signed agreements will need to be in place before they can deliver.

Gonzalez had written the bill earlier this year after complaints from restaurants that the delivery companies had been giving restaurants grief and costing them business. Many had pointed out that lateness of orders and other faults led to complaints directly to the restaurant in question rather than with the delivery company. In many cases, this led to online reviews being lowered despite the delivery not being the restaurants fault. Others have pointed out that the delivery company does not pay to be allowed to deliver from restaurants nor does it warn of large influxes of orders that could overwhelm a restaurant.

“Right now all the power really is in the hands of these delivery companies,” said Assemblywoman Gonzalez earlier this year. “They think the restaurant itself is not adhering to the normal level of service when they never agreed to be in this relationship,” she said. “When Uber Eats, DoorDash, and other gig companies operate under their own rules, businesses and consumers are harmed.”

Business owners themselves also noted how much the companies have hurt their business.

“Postmates delivers without my permission,” Pasadena restaurant owner Nick Posada explained to the Globe. “Since March, when takeout delivers have become the bulk of our business, complaints have shot up, but 90% have been through Postmates orders. Our Yelp score has gone down because of this, and we’ve lost many return customers.

“Normally this wouldn’t be too bad, but with COVID just destroying the industry right now, every customer matters, and they can kill us this way.”

Opposition to AB 2149, signing of AB 3336

Opponents of the bill had pointed out that restaurants could opt out of deliveries, but otherwise the delivery companies were third party services who have been paying full price and have offered a valuable distancing service during the pandemic.

“Why regulate a business that is paying full price, is operating on it’s own, that allows businesses to opt out of the service, and is helping people social distance,” asked Jaxon Graham, a restaurant owner in Long Beach who has opposed the new bill, in a Globe interview. “I get that some restaurants can get some odd complaints here and there, but they are literally keeping businesses afloat right now by delivering from places that normally didn’t allow delivery.”

“If it persists post-coronavirus, sure, let’s do it then. But right now you’re squeezing them when everyone needs them the most.”

Despite some Republican opposition, AB 2149 passed the Assembly and Senate by large majorities in late August, paving the way for Governor Newsom’s signature on Wednesday.

AB 2149 joins AB 3336, an Assemblywoman Wendy Carrillo (D-Los Angeles) authored bill signed by the Governor last week which regulates cleanliness and temperature controls of food delivered by delivery app companies, in changing food delivery app laws this year. Both new laws are set to become active on January 1st.