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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

#321

Post by ashtonkem »

Slartie wrote: post #97
frombody wrote: post #80

Earlier quoted context omitted.

Technically they didn't have to make any pizzas at all. I always felt like the story about the dough was embellished a little bit to avoid being charged with fraud.

They had to produce something that could legally be called a pizza to at least fulfill the purchase contract with DoorDash and avoid making themselves legally liable. But what would probably have worked would be to pull this off with two restaurants, each ordering pizzas from the other, with them sending the same physical pizzas around all the time. Cold and old pizza is still legally a pizza, just a bad one.

They have to claim that they made something that met the definition of pizza, but with the “buyer”, driver, and store colluding they could just lie.

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

#322

Post by ecf »

wpietri wrote: post #309
ghaff wrote: post #124

Earlier quoted context omitted.

The misrepresentation would seem to be the big thing. Someone, let's call them Joe, publishes a list of restaurants online with links to their menus and offers to deliver for the price of the order with tip plus a $10 delivery fee. And has a clear disclaimer that they're not affiliated with the businesses. That seems pretty unobjectionable. And how would the restaurant even know? [ADDED: Subject of course to any heal…

> some consumers will still tend to blame Sally's Piping Hot Burgers when their burger arrives soggy and cold A friend who manages an excellent restaurant says that this is indeed a problem. One of their signature dishes is fried chicken, and it is glorious. They optimize everything about the meal with the understanding that it's 15-30 seconds from the kitchen to the table. But those are the wrong choices for 15-30 m…

Why should regulation like this be enacted due to shitty consumer behavior that is evident everywhere, not just online reviews?

I really don’t know who this is helping because I’m not going to start using a more inconvenient way of ordering because these restaurants want things their way.

It’ll only result in these local businesses losing access to the $750 I pay in delivery each month.

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

#323

Post by tzs »

DGAP wrote: post #187
swyx wrote: post #15

always entertaining how regulation unintentionally acts to increase barriers to entry for incumbents. in this case closing the barn doors almost a decade after the horse left the stable. you couldn't pay politicians enough for the favors they perform in earnest. edit:to elaborate, the growth hacks of the likes of Doordash and Postmates doing exactly this got them their start, now it will be illegal to compete with th…

Exactly. If I'm in California and I want to challenge the incumbents with my cool new idea about how to do delivery better, now I can't. There's no way to effectively scale a sales team in the beginning to reach out to all these restaurants. And as you said, all the successful incumbent players already used this strategy to become big, now this won't materially affect them. They already have sales agreements in place…

> There's no way to effectively scale a sales team in the beginning to reach out to all these restaurants.

Sure their is. There's a whole system dedicated to it. You make a brochure describing the service you want to offer to the restaurants. There are then companies that will print as many copies of that brochure as you ask them to, put them in envelopes, and mail them to addresses on a list you provide. (There are companies that will make the list for you, too).

Combine that with phone calls to the restaurants you think would be most beneficial to get on your service. Three salespeople using phones could contact 10% of the restaurants in Los Angeles in under a month, and all of them within a year.

Restaurant delivery is local. You don't have to compete with the incumbents nationwide right from the start. You can do it one city at a time.

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

#324

Post by ashtonkem »

josefx wrote: post #142
dogma1138 wrote: post #12

Earlier quoted context omitted.

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

It’s not clear how that’ll work in the long run, since there’s no protective moat to protect GrubHub once they’ve outspent their competitors. Pizza companies can re-hire delivery drivers if GrubHub tries to charge monopoly prices, and the bigger chains are fully capable of making their own ordering apps.

At this point I currently order my takeout through at least 3 separate small competitors to GrubHub. That these exist while GrubHub is still trying to use VC funding to push everyone out of the market makes me doubt that they’ll be able to recoup their investment without new competitors arriving.

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

#325

Post by wpietri »

kgantchev wrote: post #161
MichaelApproved wrote: post #141

Earlier quoted context omitted.

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.

That's not true. A trademark costs around $300: https://www.uspto.gov/trademark/trademark-fee-information Enforcing it is free: you can send your own cease and desist for free. The only time you need a lawyer is if they refuse and you want to sue them. If the court rules in your favor, you can even sue them for the legal costs and costs of damages.

Is this something you have personally done? Because this sounds like an internet fantasy to me.

But suppose we indulge your fantasy. A restaurant owner, who is already incredibly busy, decides to figure out how to register a trademark and sends the cease and desist. The venture-backed startup's in-house counsel looks at it, sees that it was written by an amateur, and just laughs. Now what?

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

#326

Post by baby_wipe »

My understanding is DoorDash started out by listing restaurants without their permission. Now DoorDash has this legislation which will protect them from any new startup who tries to do the same thing. (The assumption being it will be much easier for DoorDash to obtain permission than it would be for a nascent startup.)

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

#327

Post by daveFNbuck »

wpietri wrote: post #309
ghaff wrote: post #124

Earlier quoted context omitted.

The misrepresentation would seem to be the big thing. Someone, let's call them Joe, publishes a list of restaurants online with links to their menus and offers to deliver for the price of the order with tip plus a $10 delivery fee. And has a clear disclaimer that they're not affiliated with the businesses. That seems pretty unobjectionable. And how would the restaurant even know? [ADDED: Subject of course to any heal…

> some consumers will still tend to blame Sally's Piping Hot Burgers when their burger arrives soggy and cold A friend who manages an excellent restaurant says that this is indeed a problem. One of their signature dishes is fried chicken, and it is glorious. They optimize everything about the meal with the understanding that it's 15-30 seconds from the kitchen to the table. But those are the wrong choices for 15-30 m…

Wouldn't this be a problem for any takeout order? I know some restaurants don't offer takeout for this reason.

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

#328

Post by TedDoesntTalk »

ecf wrote: post #322
wpietri wrote: post #309

Earlier quoted context omitted.

> some consumers will still tend to blame Sally's Piping Hot Burgers when their burger arrives soggy and cold A friend who manages an excellent restaurant says that this is indeed a problem. One of their signature dishes is fried chicken, and it is glorious. They optimize everything about the meal with the understanding that it's 15-30 seconds from the kitchen to the table. But those are the wrong choices for 15-30 m…

Why should regulation like this be enacted due to shitty consumer behavior that is evident everywhere, not just online reviews? I really don’t know who this is helping because I’m not going to start using a more inconvenient way of ordering because these restaurants want things their way. It’ll only result in these local businesses losing access to the $750 I pay in delivery each month.

> due to shitty consumer behavior

This is not shitty consumer behavior. It is lying... a company pretending to be another company or a representative of another company... when they are not.

If you buy a fake Toyota car and it sucks, do you blame Toyota then complain when a law is passed making this fraud illegal?

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

#329

Post by zeroonetwothree »

kome wrote: post #58
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…

"Maybe it's that the first is an involuntary participation without someone's agreement, while the 2nd is someone agreeing to work under given conditions?" It's an old debate, the "lochner era" debate ( https://en.wikipedia.org/wiki/Lochner_era ). "Agreeing on conditions" is not enough to make something fair. You may agree because you are desperate and you need cash, you may go straight to voluntary serfdom... Society…

“The greater good” is clearly not the actual legal requirement...

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

#330

Post by cforrester »

ashtonkem wrote: post #316
wpietri wrote: post #309

Earlier quoted context omitted.

> some consumers will still tend to blame Sally's Piping Hot Burgers when their burger arrives soggy and cold A friend who manages an excellent restaurant says that this is indeed a problem. One of their signature dishes is fried chicken, and it is glorious. They optimize everything about the meal with the understanding that it's 15-30 seconds from the kitchen to the table. But those are the wrong choices for 15-30 m…

I’m incredibly perplexed why people do this. Even pre pandemic it was patently obvious to anyone who paid attention that certain foods just don’t deliver well. Before the internet became a thing, the only places that regularly offered delivery were pizza joints and Chinese food, because both of those survive delivery well! I ordered delivery burgers once, from a restaurant close by, and learned my lesson that burgers…

I think it's a matter of expectation more than anything. Someone who orders food from a restaurant might expect that the restaurant has recipes designed for delivery. I wouldn't expect a top quality restaurant burger when I order delivery, but I'd still be disappointed if it were a soggy mess instead of the 5-8/10 I've come to expect from decent delivery options.
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