California Signs the Fair Food Delivery Act which Prohibits Food Delivery Apps from Listing Restaurants on their app without their permission

Doordash has a long list of restaurants on their app for potential customers to choose from. Many of these merchants are partnered restaurants which means that Doordash takes a cut of every order that comes from the Doordash app. Usually, the percentage that Doordash takes is between 20 and 30 percent of the order.

Partnered restaurants are usually at the top of the Doordash app list due to the fact that they have a signed relationship with Doordash. With that said, these partnered restaurants will receive lots of orders from the Doordash platform. Sounds like a great business relationship right?

Doordash lists non-partnered merchants on their app

Not all restaurants that are listed on the Doordash app are partnered merchants. Doordash will also list non-partnered restaurants to give their customers more options. These merchants may or may not know that they are listed on the app. Some don't care and actually embrace it as they see it as a way to get free business thrown their way.

Remember, they are not a partnered merchant so there is no cut to Doordash. A lot of people feel that that at this stage Doordash is letting a restaurant experience the benefits that Doordash can offer them. By driving customers to the restaurant, hopefully the merchant will eventually want to partner with Doordash. This is sort of like a test run and many restaurants appreciate it.

Some restaurants do not want to be listed on Doordash

Even though some non-partnered merchants are happy with the free business that is thrown their way, there have been many merchants that have not been very happy with Doordash listing their restaurant on the Doordash platform.

Many merchants even complained to Doordash to get their restaurant taken off the list only to be ignored. This whole situation has been a problem for many restaurants since the emergence of on-demand food delivery.

When Doordash messed with the wrong merchant

There has been restaurants that didn't want to be listed on Doordash that have had to battle the food delivery app to get taken off. It's been reported by many non-partnered merchants that it's not as easy as just calling them and having their restaurant taken off. Some merchants even have reported that they felt ignored.

Back in 2015, a very young Doordash company messed with the wrong merchant and was sued by In-N-Out Burger. The famous food chain claimed that they never gave Doordash permission to deliver their food and were very concerned about not being in control of the deliveries. Concerns about the amount of time a delivery would take as well as the safety measures that delivery drivers were taking were part of In-N-Out Burger's complaints.

Part of the lawsuit even included infringement as In-N-Out Burger claimed that Doordash was using a fake logo of In-N-Out on the Doordash website. They were not happy at all that Doordash was giving the impression to its customers that they had a relationship with In-N-Out when they in fact had no relationship at all. It would be safe to say that Doordash wanted no battle with In-N-Out and ended up voluntary taking In-N-Out Burgers permanently off of their platform.

All food delivery apps list non-partnered restaurants on their platform

Don't think that Doordash has been the only food delivery app that has practiced listing non-partnered restaurants on their app. Throughout the years, Postmates, Grub Hub and Uber Eats have all done the same thing. I'm sure even the smaller and less known similar type companies have done the same thing as it has become common practice.

California signs the Fair Food Delivery Act Assembly Bill 2149

All of this listing random restaurants on your app will soon be coming to an end in California thanks to California Governor Gavin Newsom. A new measure called the Fair Food Delivery Act was signed by Gov. Newsom recently.

With this new legislation, the food delivery apps will no longer be able to list any restaurants on their app without their permission first. This permission has to be in writing and can be something as simple as an email.

Doordash response to the Fair Food Delivery Act in California

Doordash responded and let it be known that they don't have a problem with this new law and that they would certainly comply. They said that they will continue to demonstrate the value of Doordash and the variety of options that they provide to support their merchant partners. Well said Doordash!

Another on-demand food delivery app, GrubHub, also made it known that they were fine with the new legislation. They said that it would level the playing field with their competitors. They shared how they never thought that adding non-partnered restaurants was beneficial, but that is was necessary to compete with the other food delivery apps.

There was a time when a large portion of the population had no idea what Doordash was

Any gig food delivery driver that has been doing this kind of work for years has certainly picked up food from merchants that did not even know that they were there to pick up food for a food delivery app. Sure, most people know what Doordash, Postmates and Uber Eats are today, but if we go back four or five years, there was a large percentage of people that had no idea what these food delivery apps were.

How do restaurants feel about Assembly Bill No. 2149?

Assembly Bill No. 2149 is what is giving merchants more power on their decision as to whether they want to be listed on a food delivery platform or not. As we talked about above, some restaurant owners will be happy with this new law as they have been fighting the food delivery apps for years. This will put an end to their battle.

With all of that said, there are just as many other restaurants that have an entirely different opinion. They do not want to be taken off of any platforms. They love the extra business that they get from these apps.

They do not want to sign any agreements with anybody. They don't want a contract with anybody. They just want to prepare food for their customers and don't care where their orders come from. For these merchants, a loss of business will not seem fair at all.

Will other states follow the Fair Food Delivery Act measure?

With California signing this new law, there's no telling if other states are going to follow or not. California voters are still going to have to decide the outcome of proposition 22 which will decide among many other things if gig drivers in California are to become employees or remain independent contractors. One thing that is certain is that the state of California is certainly keeping all the gig driver companies on their toes. By the way, vote YES on Prop 22!