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Bill would make app-based delivery companies work with restaurants

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RICHMOND — The Virginia General Assembly is close to passing a bill that would require app-based delivery companies to work more closely with restaurants before advertising their menu options and delivering their food.

Lawmakers want to ratchet up oversight of the industry at a time when food delivery services have surged during the COVID-19 pandemic. The sweeping proposal would require companies like Uber Eats, Grubhub and DoorDash to enter into formal agreements with local restaurants before advertising food delivery to their customers.

Supporters say restaurant owners might not know their food is being advertised or delivered through an app-based company. The restaurant industry has complained that when apps post incorrect menus and prices and fail to ensure food is delivered properly, the businesses can gain a bad reputation from customers unhappy with the experience.

“Restaurants are concerned and want to be aware of how that food is being delivered because sometimes there are special instructions, there’s a limited amount of time the food can be transported or there are special temperatures it needs to be stored at, so it’s important to be working in partnership with them,” said Del. Rodney Willett, D-Henrico, who patroned the bill.

The Fair Food Delivery Act is modeled from a nearly identical law with the same name that went into effect in California last month.

The House of Delegates passed the bill on a vote of 90-8 earlier this month. A Senate committee backed the bill on Monday, sending it to the floor for a vote from the full chamber later this week.

The measure doesn’t specify what must be in the agreement.

One issue between the restaurants and the app-based delivery companies has been the fees charged to either the restaurant or the online customers that were not agreed upon in advance.

Cities and states across the country have been seeking to put caps on fees the third-party delivery apps charge restaurants with each order. Fees can sometimes run up to 30%. Capping the fees has been divisive in the restaurant industry, which is struggling to survive during the pandemic and relies on the delivery companies for business. If fees were imposed on restaurants, they could fall more on customers.

Robert Melvin, a lobbyist for the Virginia Restaurant, Lodging and Travel Association, wrote in a statement the agreements between restaurants and app-based delivery companies would be a better path forward in regulating the relationship between the two industries rather than caps on fees.

Some of the main delivery companies have said they would comply with the California law without any problems. While customers may notice a difference, the companies have been making an effort for some time to partner with merchants so service isn’t significantly disrupted, according to financial filings.

“These are certainly valuable services,” Willett said. “This bill seeks to protect restaurants in this transaction to make sure they’re part of the transaction.”


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