SACRAMENTO – When struggling small restaurants turned to food delivery apps to keep their businesses afloat during the pandemic, many owners reported actually losing money on their orders. Thursday, Governor Gavin Newsom signed Assembly Bill 286 into law, requiring food delivery companies like GrubHub, DoorDash and UberEats to reveal all hidden charges and fees in a clear, itemized cost breakdown of each transaction to restaurants and their customers.
“Gig companies have profited during the pandemic by keeping consumers and restaurants in the dark about the true cost of their services,” Assemblywoman Gonzalez (D-San Diego) said. “Now, small restaurants and their customers will know what they’re being charged upfront and get to see exactly how much is actually benefiting the restaurant.”
AB 286 builds off of Gonzalez’s 2020 legislation – the Fair Food Delivery Act – which required food delivery app companies to have an agreement in place with restaurants before advertising their business. With AB 286 set to take effect on January 1, restaurant owners will have more control over their transactions with food delivery apps.
Right now, food delivery apps obscure how much money is actually going to individual restaurants, making it difficult for consumers to support local businesses when they can’t make an informed choice. Under AB 286, restaurants can opt to have each fee and commission they’re being charged by a food delivery app disclosed directly to the customer, while also receiving a breakdown of exactly what their customers are paying to a delivery app. AB 286 would also ensure that restaurants and other food facilities ultimately control the price of food and beverages that are sold through delivery apps.
For food delivery workers who are completing these orders, the new law also provides protections against tip theft, such as when gig companies use customer tips to subsidize workers’ base pay. AB 286 clearly states the workers are entitled to the full amount of their customer tips and gratuities after completing an order.
Assemblywoman Lorena Gonzalez represents California’s 80th Assembly District, located in southern San Diego County, including the cities of San Diego, Chula Vista, and National City. She serves as Chair of the Assembly Committee on Appropriations and Chair of the Assembly Select Committee on Latina Inequities. For more information on Assemblywoman Lorena Gonzalez, visit http://asm.ca.gov/gonzalez