The National Restaurant Association released on Wednesday a list of seven public policy principles in collaboration with third-party delivery companies and operators to guide lawmakers in developing policies and legislation for fair delivery practices.
The major third-party delivery companies, including Grubhub, Uber Eats, and DoorDash worked with restaurant operators over the course of a year to come to an agreement on what fair third-party delivery would look like both for the delivery companies and the restaurant owners themselves. The seven principles include:
- Restaurants have a right to know when and if their food is delivered
- Customers should expect the same degree of food safety as they do when dining in a restaurant
- Restaurants should be able to offer alcohol to customers through third-party delivery in a safe and legal manner
- Restaurants deserve transparency on fees (including commissions, delivery fees, and promotional fees) charged by third-party delivery companies
- Third-party delivery contracts need contractual transparency and issues surrounding fees, costs, terms, policies, marketing practices involving the restaurant or its likeness, and insurance/indemnity should be made clear
- Sales tax collection responsibility must be clear in terms of which party is collecting and remitting the specific sales tax to the appropriate authority
- Third-party delivery companies should offer restaurants access to anonymized information regarding orders from their restaurant that originate on third-party delivery platforms
“Until now, the relationship between restaurants and third-party delivery companies lacked a national framework to protect restaurants,” Mike Whatley, vice president for State and Local Affairs for the National Restaurant Association said in a statement. “These new principles, which center around permission and transparency, add consistency and structure that will benefit all restaurants. This agreement represents an important first step in an ongoing dialogue between restaurants and third-party delivery companies about ways to improve our relationship going forward.”
The seven principles emphasize transparency, communication and protection of all parties involved. For example, the first principle, which would give restaurants the right to know when and if their food is delivered would require third-party delivery companies to obtain written consent “of the specific restaurant where the restaurant authorizes the third-party delivery company to list the restaurant on the platform, use its name, menu, symbols, and images, and offer its food to customers” and they should work together to offer an up-to-date menu, including descriptions and prices.
This reflects the increasing concern in 2019 and early 2020 that restaurants are being listed on third-party delivery apps and websites without their knowledge or consent or are listing non-partnered menus from restaurants. In September, California Gov. Gavin Newsom passed a law to prevent third-party delivery companies from delivering food without an operator's knowledge or consent.
Beyond the conflict between restaurants and operators over being listed without their knowledge, friction has grown over the past year between third-party delivery companies and operators. During the pandemic, multiple local legislatures, including New York City, Chicago, Seattle and Los Angeles, introduced third-party delivery fee caps between 15-20% to protect restaurants that were struggling amid closed dining rooms and regional lockdowns. Third-party delivery companies have also been involved in lawsuits, including an antitrust lawsuit filed in July, accursing the major delivery companies of monopolizing delivery prices by not allowing restaurants to sell menu items cheaper on other platforms, including their own internal orders.
Third-party delivery companies have responded in multiple ways to these challenges. While DoorDash has added a $1.50 surcharge for Chicago customers in response to the city's 15% delivery fee cap, Grubhub just announced Tuesday that they will be eliminating delivery fees for Chicago and New York City residents through mid-March to encourage people to support restaurants this winter.
Another issue that has been repeatedly mentioned as a major pain point by operators partnering with third-party delivery companies is the lack of access to customer data. One of the proposed principles released by the National Restaurant Association would allow operators to see orders, know when and where orders were whether orders are organic or tied to promotions, and see delivery statistics like see average delivery time once orders leave the restaurant and if the orders came from new or returning customers. The principles would also allow operators the opportunity to communicate with customers and respond to feedback.
The principles also emphasize the importance of standardizing hygiene practices, whether they’re delivered by third-party delivery companies or by the restaurant themselves, with particular attention to “basic food safety principles including personal hygiene, forms of contamination, time and temperature abuse, and cleaning and sanitizing.”
"These principles will help strengthen the critical relationship between the diners, drivers and restaurants that has grown even more important during the pandemic," Seth Priebatsch, chief revenue officer at Grubhub, said in a statement. "We look forward to continuing to work with the National Restaurant Association to deliver for the hundreds of thousands of restaurants we’re proud to partner with every day."
DoorDash and Uber Eats expressed similar sentiments and commitments to working with the restaurant industry toward future policies that emphasize fairness and transparency.
“As one company, we’ve recently made commitments to listening to and learning from merchants and have worked together to support the National Restaurant Association’s development of these new principles that are designed to address the most pressing interests of the industry,” Stephane Ficaja, head of Uber Delivery for the U.S. and Canada said in a statement.
"We are proud to support these principles through the range of products and services we’ve developed for restaurants, and we look forward to continually improving our offerings to best serve our restaurant partners," Max Rettig, global head of public policy at DoorDash said in a statement.
Contact Joanna Fantozzi at [email protected]
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