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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

#51

Post by lesdeuxmagots »

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…

Yea, I do wonder if this will shut the door on any future high growth independent startups in the space to be created locally.

DoorDash started their business doing exactly this in Palo Alto, and likely wouldn’t have been able to raise the funds or grow at the pace they did without this strategy.

On one hand, you could say good, these sorts of businesses are exploitative. But I’m not sure that the industry is a net negative as a whole, and this law could shut the door on a more sustainable model.

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

#52

Post by ratww »

GauntletWizard wrote: post #37
ratww wrote: post #14

Earlier quoted context omitted.

The problem is not sending a courier. You can use Apps to send someone there without a problem. The problem is them impersonating the restaurant and giving customers the impression that the restaurant is offering the delivery service themselves.

I disagree with this law, like I've disagreed with many laws before it: the creation of a specific law implies that what came before was not fraud. It was fraud. Prosecute it as such. Offering to courrier food from place A to B, including ordering the food from place A, should not be illegal. Pretending to be A to engage in that business is fraud, because you pretended to be A. It's that simple. This law is a giveawa…

Good point, I agree with you.

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

#53

Post by say_it_as_it_is »

This is an industry operating outside the scope of what restaurants have ever offered. Once delivery companies began making a lot of money with courier services, people created a story of exploitation and market manipulation. The reality, however, is that food service providers want in on the action: the bill gives providers bargaining chips to negotiate getting a cut for services that they never offered before. A consequence to this change is that while the restaurants do not face losses due to courier services, the courier services will lose as a result of the bill. Courier services now have a legitimate claim against the state and restaurants. It's time to go to the Supreme Court.

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

#54

Post by 1-6 »

amingilani wrote: post #32
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.

Similar story but with Door Dash. Explanation: Door Dash charged lower than actual price, so owner placed an order and sent just plain dough. Their profit was higher than cost of making the pizza. https://themargins.substack.com/p/doordash-and-pizza-arbitra...

Now that's what I call making dough!

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

#55

Post by ehnto »

darawk wrote: post #28
ehnto wrote: post #17

Earlier quoted context omitted.

You could still do that without the app listing the restaurants without their permission. There is a clear exploitation happening here, I think it's right to find a way to stop it. We should get better at iterating on policy though, maybe this doesn't work out or stops some other kind of less exploitive business from operating and they need to adjust it.

What is the exploitation exactly?

The delivery platform represents a business relationship with a restaurant that doesn't exist, and uses it to pull value out of the services the restaurants offer. As a business you get to choose which other businesses you work with, and on what terms. In this case they haven't given the restaurant the opportunity to negotiate terms.

It's new ground sure, but I think it's pretty clear that the delivery platform is a service provider to the restaurant and as such the restaurant should have some negotiating power. What if they want a cut of the delivery fee, or guaranteed delivery windows for their customers? Probably wouldn't get it, but that's a negotiation they should be able to have.

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

#56

Post by Ekaros »

ehnto wrote: post #47
roenxi wrote: post #42

Earlier quoted context omitted.

The linked bill says > A food delivery platform shall not arrange for the delivery of an order from a food facility without first obtaining an agreement with the food facility expressly authorizing the food delivery platform to take orders and deliver meals prepared by the food facility. Nothing there is talking about apps or listings.

That wording leaves room for personally arranged general couriers in my opinion, but that would end up getting defined in court at some point down the road.

I think key question here would be definition of "food delivery platform". Generic courier service or personal assistant or even taxi driver is likely not to qualify under such title.

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

#57

Post by dalbasal »

The "uberfication" startup model had/has the same internet economics magic that dropshipping, crowdsourcing and such had, but for VC backed startups.

As usual, XKCD captures the jist: https://xkcd.com/1060/

Users order food. App for that. Food is delivered by non-employees. HR is an app. Suppliers don't have to know they're suppliers. The CEO can focus on visionary statements.

A software business has magic economics because they don't need capital assets (and therefore capital investment) and they don't have marginal costs. Just software development. Uberfication minimizes even that.

It's looking pretty uninspired at this point. Let's step back and think of the problem space. Food. Takeaways. Unless it's soylent or vegan meat, startup founders seem to consider actually making the food beneath them.

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

#58

Post by kome »

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 and policy makers are fully entitled to disrupt "private contracts" when those contracts are not in line with the greater good.

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

#59

Post by roenxi »

ratww wrote: post #14
roenxi wrote: post #9

This is a silly law. If someone feels like sending a courier to buy take away then that should be legal.

The problem is not sending a courier. You can use Apps to send someone there without a problem. The problem is them impersonating the restaurant and giving customers the impression that the restaurant is offering the delivery service themselves.

Unless there is some rather serious context I'm missing - and as I said in another comment - the linked bill says:

> A food delivery platform shall not arrange for the delivery of an order from a food facility without first obtaining an agreement with the food facility expressly authorizing the food delivery platform to take orders and deliver meals prepared by the food facility.

I don't think you can use Apps to send someone there without a problem. They have to get 'express authorisation' from the restaurant before they can accept your order. That is silly.

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

#60

Post by AmericanChopper »

danielheath wrote: post #33
throwawaysea wrote: post #30

Earlier quoted context omitted.

I'm not sure I understand the suggestion. Why shouldn't a courier service be allowed to list a business to get something from. That's like saying "people can't use mapping services". This doesn't feel like exploitation to me but maybe I don't understand your position fully.

A courier can still collect food. They can’t impersonate the restaurant anymore.

The law prohibits a courier from being commissioned to place an order, collect it, and deliver it to you. It’s just criminalizing a perfectly legitimate form of arbitrage. The law isn’t about couriers impersonating restaurants either, because that’s just fraud and it’s already illegal. It’s just another example of a terrible law created at the behest of businesses that aren’t competent enough to keep up with changes in the market. But why would they bother when they can just seek a legislative solution?
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