Calif. bill would force third-party deliverers to share customer info

The latest in a flurry of bills aimed at regulating the services would apply only to certain pieces of data, and only upon request once a year.
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A bill under consideration in the California legislature would entitle restaurants to some of the information that’s collected about customers who order delivery through a third-party service.

The measure is the latest in a recent wave of proposals aimed at regulating the activities of the services, which generated about $10 billion in sales for 2018, according to Technomic.  The Illinois Restaurant Association is reportedly pushing the legislature in its state to set food safety standards for Grubhub, Uber Eats and similar meal deliverers. Rhode Island is considering a measure that would prohibit the services from listing a restaurant on their marketplace-style apps without first securing the permission of the restaurant. New York state is looking at capping commission fees, which can run as high as 30%. New York City has investigated allegations that some services charge restaurants a fee for informational calls that don’t result in an order being placed.

The initiatives underscore the love-hate relationship between restaurants and the services, which often expand an establishment’s marketing scope to consumers who are regular users of the third parties’ apps but may not be familiar with the restaurants listed. The high fees charged as a commission on delivery orders is one of the major flashpoints, along with the services’ refusal to share information about customers. They argue that users of their apps are their customers, not the restaurants’, and that they are therefore entitled to hold and analyze the data. Restaurants counter that inaccessibility to the data hampers their efforts to market to those fans of their food.

The measure introduced in the California Assembly last week by Lorena Gonzalez, D-San Diego, would oblige the services to provide a restaurant upon request with some information about a consumer who orders delivery from the place via the third party’s app or website. The mandated data would include the customer’s email address, telephone number, delivery address and order history with the restaurant submitting the request.

The information would cover all transactions, going back as far as the service has offered delivery from the restaurant in question. The bill would require that the data be provided within 30 days of the request, but the information could be requested only once every year.

The info-sharing requirement would apply to any restaurant whose food was being delivered by a third-party service, regardless of whether the arrangement was struck via a signed contract.

Gonzalez said in a statement that her proposal is intended to provide restaurants with valuable information on the customers they provide with delivered meals instead of letting the middlemen services keep and use that data for their own marketing purposes.  “Restaurants shouldn’t fear losing their customers when they don’t agree to the conditions of some multimillion-dollar food delivery app. This bill will put the power back in the hands of small business owners in California,” she said.

“One-on-one engagement—hearing feedback from customers, being responsive to complaints, addressing the quality of service and delivery—it’s critical to ensuring a good experience,” Greg Dulan, owner of Dulan’s Soul Food Kitchen and Hotville Chicken in Los Angeles, said in the statement announcing the bill’s introduction. “It is hard to do that if we don’t know who our customers are—this bill will fix that.”

The measure apparently has the support of the California Restaurant Association. “The tech platforms who are delivering the food and the restaurants who are preparing it both have a responsibility for the customers’ experience and satisfaction,” CEO Jot Condie said in the announcement. “If we are going to be partners in this, we both need to be part of that communication channel.”

A hearing on Gonzalez’s bill, A.B. 2149, is scheduled for March 11.

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