States such as Colorado, New Hampshire, and Texas are taking action against third-party food delivery services. This new legislative trend seeks to place restrictions on third-party food delivery platforms, specifically requiring the company to get permission from a restaurant prior to listing them on the app and acting as their delivery service.

Opposing Industry Perspectives

It is easy to understand why food delivery apps would prefer to offer as many options as possible to their customers; a larger network of restaurants means growth, increased revenue, and a leg up on the competition.

Restauranteurs and their staff, however, share a different opinion. Common problems that arise from third-party food delivery apps listing restaurants without their knowledge or consent include: 

  • Orders for delivery may be placed at the restaurant, resulting in a longer wait time for customers.
  • The menu listed online may have outdated prices or list discontinued items, resulting in customer disappointment.
  • The food may not be ideal for takeout or travel, thereby inaccurately representing restaurant quality to customers.
  • The customer was delivered the wrong food.
  • The delivery was late.
  • Restaurants do not have customer contact info.

When these problems occur, it isn’t the delivery app who takes the brunt of the heat. Customers complaints for problems created by the delivery app land squarely on restaurants.

Given that in many cases restaurants aren’t aware of being listed on third-party delivery websites, or denied partner authorization, restauranteurs feel this lack of control and consequent customer problems hurt their reputation. It is the restaurant that receives poor online reviews due to circumstances out of their control.  

Current Legislative Progress

At present, California is the only state where it is illegal for delivery apps to list restaurants without obtaining permission.

States and municipalities that are currently trying to enact similar laws and regulations are united in a common goal to make it illegal for delivery platforms to offer delivery services without obtaining permission. This allows restaurant owners to protect their brand while providing the best service to their customers.

States aim to return control to the restaurant and wish to enact penalty fees for third-party apps who violate this law, ranging from 100 to 1000 USD per incident.

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