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Tech roundup: Third-party delivery companies are under fire again

More states want to ban delivery companies from adding restaurants without consent, and the U.S. labor chief endorsed an employee model for gig work. Also, Wow Bao and MrBeast Burger keep growing.
DoorDash app on phone
Photograph: Shutterstock

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A common third-party delivery practice is on the ropes in two more states. Legislators in Illinois and Nevada are considering bills that would prohibit delivery companies like DoorDash, Uber Eats and Grubhub from adding restaurants to their platforms without permission.

If passed into law, the states would join California in outlawing the practice.

Both bills breezed through the Illinois and Nevada senates with unanimous support and now await approval by a second body. Each would require delivery companies to get written consent from restaurants before listing them on their marketplaces.

"While third-party delivery services can bring more money in for local restaurants, those same restaurants can be caught off guard by receiving an influx of orders and not having enough staff," said Sen. Melinda Bush, sponsor of the Illinois bill, in a press release. "Additionally, it's simply not fair for other people to receive profits from a business without permission to deliver its items."

A similar bill introduced last year in Rhode Island never made it to a vote.

Delivery companies use the tactic to quickly increase their restaurant supply, and there are likely hundreds of thousands of such "nonpartner" restaurants on delivery platforms. But it can create headaches for restaurants: Often the menus aren't accurate, and the restaurant may not even be aware it's listed. 

In another troubling sign for delivery companies, U.S. Labor Secretary Marty Walsh last week called into question the prevailing gig labor model.

"We are looking at it but in a lot of cases gig workers should be classified as employees" as opposed to contractors, Walsh said in an interview with Reuters.

Third-party delivery companies put up a big and expensive fight in California last year to ensure workers could continue to be contractors with some added benefits. Walsh's comments suggest a bigger fight could be coming over things like a set wage, sick time and healthcare benefits that would change how those companies operate.

The delivery companies have argued that couriers prefer the flexibility of contract work, and that the added costs of full employment would lead to reduced fleets and more expensive delivery.

Wow Bao inks deal for 100 more virtual locations. The Asian bao and bowl chain is the latest to partner with Ghost Kitchen Brands to grow through its off-premise-focused kitchens in the U.S. and Canada. Many of those are in Walmart stores.

The deal adds another prong to Wow Bao's virtual expansion strategy. It has a goal of reaching 1,000 such outposts by the end of 2021 through licensing and other partnerships, and is ahead of schedule, the chain said in a press release.

Saladworks and Nathan's Famous unveiled similar partnerships with Ghost Kitchen Brands recently. The company's kitchens feature multiple brands, including restaurants and packaged goods, that customers can mix and match for delivery and pickup.

Speaking of rapidly expanding virtual footprints, MrBeast Burger has doubled in size. The virtual brand that went viral when it launched in December now stands at 600 locations, according to a tweet from Jimmy Donaldson, aka MrBeast. 

The tweet was announcing a new MrBeast menu item—the Dream Burger—in partnership with a fellow YouTuber called Dream.

Minnow raises $2.2 million for its contact-free pickup cabinets. The Seattle-based company will use the funding to help keep up with the deluge of demand for its internet-of-things-enabled pickup pods (pictured below). The company highlighted the added layer of safety and security provided by the pods and said the majority of interest has come from foodservice and commercial real estate. Elevate Capital out of Portland, Ore., led the seed round.

Minnow pickup pod

New hires

  • Guest experience platform Paytronix Systems hired Kristin Lynch as director of restaurant insights. She will work with brands that use Paytronix Data Insights to get the most out of customer data from loyalty programs, email clubs, online ordering and more.
  • Equipment service company 86 Repairs hired Sean Ramsey as its head of revenue. He will help grow the company's revenue through customer acquisition, sales, account management and retention. 86 Repairs recently raised $2 million to drive growth.

 

In case you missed it...

Why the shift to delivery might not last.

Uber Eats will let people pick up food mid-Uber ride.

DoorDash unveils a new pricing plan for restaurants.

Grubhub had a record-setting first quarter.

Nextbite is launching more celebrity virtual brands.

The pandemic might be slowing, but digital sales aren't.

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