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California law bans delivery apps from listing a restaurant without an agreement

leginfo.legislature.ca.gov

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Re: California law bans delivery apps from listing a restaurant without an agreement

#141

Post by MichaelApproved »

ummonk wrote: post #109
ramphastidae wrote: post #105

This is undeniably a good thing if you put yourself in the shoes of the restaurant. Imagine if someone went around impersonating your business online, leveraging the good name you have built for yourself over the decades. They create ads offering your expert development services, ostensibly competing with your existing website, but with intentionally slashed pricing and a ‘creatively’ misrepresented offering (aka gro…

Why does that require anything other than enforcement of existing trademark law?

Creating and defending a trademark is very expensive.

Many restaurants would prefer not to spend this money just to prevent unauthorized listings.

They’d rather delegate the responsibility of preventing unauthorized listings to the state attorney who has more resources and expertise.

Re: California law bans delivery apps from listing a restaurant without an agreement

#142

Post by josefx »

dogma1138 wrote: post #12
foobar1962 wrote: post #6

There was a post a few months go about a pizza place that started getting customers complaining about their food arriving cold and damaged: except they didn't offer delivery. They discovered that a popular search engine was offering free delivery. The story ended with them ordering dozens of pizzas from themselves to themselves and making a nice profit.

How did they made a profit off this?

The goal is to kill the competition, no local delivery service can compete with a few million in VC funding. Once you are the only delivery in town you can raise the prices all you want and force the local restaurants into one sided deals on your terms. It also has a rather questionable legality

Re: California law bans delivery apps from listing a restaurant without an agreement

#143

Post by Slartie »

mytailorisrich wrote: post #133
Slartie wrote: post #127

Earlier quoted context omitted.

Look closely. It is just illegal for the food delivery platform to arrange for a delivery. It is NOT illegal for YOU to arrange for a delivery to you, even if you do that through an online platform. Go to Craigslist and offer some dollars to anyone who picks up your food at a takeout place and delivers it to you. You don't have a problem at all with this new legislation, unless of course you want to be the shady midd…

This is a rather disingenuous take. There is nothing shady in arranging food deliveries. This bill is ill-thought-out.

In which way is my interpretation "disingenuous"?

Re: California law bans delivery apps from listing a restaurant without an agreement

#144

Post by kelnos »

s_dev wrote: post #131
ummonk wrote: post #109

Earlier quoted context omitted.

Why does that require anything other than enforcement of existing trademark law?

Despite the downvotes -- I think there is a genuine question here. There isn't the need for more laws just enforcement of existing ones. Purporting to represent someone elses business is an egregious infringement of trademark.

I would guess that most non-chain restaurants don't own a trademark for their name. It's an expensive process that many likely can't afford.

Re: California law bans delivery apps from listing a restaurant without an agreement

#145

Post by bombcar »

foogazi wrote: post #101
DevKoala wrote: post #38

Earlier quoted context omitted.

What do you mean? In this case small businesses were being abused by delivery apps. Once these apps captured the customers of the small business, they converted the customers to their alternative offering restaurant. This is a good piece of legislature unless I am missing something.

How were businesses being abused? Do you mean customers use the app to order from X-Pizza, the app then prominently lists Y-Pizza and now X loses customers?

The main issue that I saw was:

1. Customer orders from Big Don’s Pizza (but it’s actual door dash) 2. Pizza arrives late, cold, and on fire. 3. Customer swears to and at Big Don that he’ll never buy from them again. 4. Dominos wins.

Re: California law bans delivery apps from listing a restaurant without an agreement

#146

Post by Ekaros »

ozim wrote: post #125
XorNot wrote: post #120

Earlier quoted context omitted.

Why? The practice involved is in response to the absolute garbage of misrepresentation of a restaurant's telephone number to be intercepted by your own call centre's.

Because if would like to have a honest delivery service that is not faking some restaurant, with the new law you will not be able to provide such service. It will be a lot more hassle to pick up something.

I don't think it is anyway unreasonable for such service to come to agreement with the restaurant. And absolutely beneficial for both parties.

Re: California law bans delivery apps from listing a restaurant without an agreement

#147

Post by novia »

say_it_as_it_is wrote: post #76
supernova87a wrote: post #49

I admit that I have yet to reconcile my own somewhat conflicted feelings about these recent bills (e.g. the one voted on in Nov 2020 about drivers as contractors, versus this one). For example, I'm in favor of regulating tech companies from misrepresenting restaurant menus as their own, and extracting a hefty margin off restaurants' barely-surviving profits by merely being a middleman aggregator. Yet on the other han…

I don't understand how couriers are extracting any margin from restaurants.

Right now restaurants are in a damned if you do damned if you don't situation with the various delivery services out there.

If the restaurants explicitly agree to do business with grubhub and the like, they have to give the delivery service a 10% cut. The delivery service also takes a percentage cut on the customer side. I think there's the expectation that the restaurants keep charging the delivery service the same amount for food being delivered as they charge anyone who orders food from the restaurant and picks it up. This forces restaurants to raise the price for all their customers to pay for that 10% cut.

Have you noticed that the prices for food via delivery are higher than the price for food you pickup? That's not due to the restaurant charging the delivery service a discriminatory price, that's actually the third way that the food delivery service takes a cut.

Now, as a restaurant owner, you look at all these facts and decide that the delivery companies are fleecing you. You decide you'll use the waiters and waitresses you already had on staff to deliver the food to your customers, and you'll charge them something like $5 for delivery. Not really that unreasonable, given the circumstances, right?

Well, what happens in those cases is that the delivery companies will list the restaurant anyways. And they'll offer free delivery. And they'll charge less for your food online than you charge them. They take the financial hit so later they can come to the restaurant owner with the data to show that they really need the delivery service after all. They'll undercut your business to get a greater market share. They've got lots of VC money to burn, that you, as a restaurant owner, can't compete with.

Through all of this, customers will leave negative reviews on Yelp, for the restaurant, when the wrong food is delivered, or their food is cold, or their order was delivered to the wrong place. The reputation of the restaurant takes a hit due to the third party's shoddy delivery people.

That's what this law is attempting to address.

Re: California law bans delivery apps from listing a restaurant without an agreement

#148

Post by ghaff »

ozim wrote: post #125
XorNot wrote: post #120

Earlier quoted context omitted.

Why? The practice involved is in response to the absolute garbage of misrepresentation of a restaurant's telephone number to be intercepted by your own call centre's.

Because if would like to have a honest delivery service that is not faking some restaurant, with the new law you will not be able to provide such service. It will be a lot more hassle to pick up something.

All they have to do is get permission from the restaurants.

Re: California law bans delivery apps from listing a restaurant without an agreement

#149

Post by ghaff »

tremon wrote: post #140
say_it_as_it_is wrote: post #76

Earlier quoted context omitted.

I don't understand how couriers are extracting any margin from restaurants.

They don't. They make their margin by fleecing investors.

Their negative margin.

Re: California law bans delivery apps from listing a restaurant without an agreement

#150

Post by NineStarPoint »

s_dev wrote: post #131
ummonk wrote: post #109

Earlier quoted context omitted.

Why does that require anything other than enforcement of existing trademark law?

Despite the downvotes -- I think there is a genuine question here. There isn't the need for more laws just enforcement of existing ones. Purporting to represent someone elses business is an egregious infringement of trademark.

The answer is likely that our legal system is too expensive for local restaurant owners to afford the cost of suing a grubhub sized company. Restaurants are a business notoriously prone to failure and low margins. Maybe a class action lawsuit would work in this case, but mostly it’s just another case where the legal system needs to be fixed to rely less on having money for justice to occur.
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