On Monday, June 14, the Seattle city council unanimously passed a bill requiring all third-party food delivery platforms to have written contracts with restaurants prior to placing them on their apps. If a restaurant wants to get out of a contract, it can do so at any time through a written request — the app would then have 72 hours to remove the place from its listings or face a fine of up to $250. Revenue for any penalties would go toward supporting small restaurants in Seattle; the law — known as the Fair Food Delivery Act — goes into effect September 15.
Seattle’s new legislation is modeled closely after a similar bill that passed recently in California, which requires apps to remove any non-partnered restaurants from their platforms. That law was enacted after Pim Techamuanvivit, the owner of San Francisco’s Michelin-starred Thai restaurant Kin Khao, detailed the issues she had with GrubHub, Seamless, and other apps listing food purportedly from her menu without her permission in January 2020. Not long after Techamuanvivit’s complaints, Seattle’s own high-end restaurant Lark ran into similar problems with Seamless.
Third-party apps had previously justified listing non-partnered restaurants as a necessary byproduct of doing business in a competitive market. In October 2019, Grubhub CEO Matt Maloney said in a letter to shareholders expanding such a practice was an important part of the company’s business strategy to keep up with rival apps. At the time, Grubhub admitted in a statement to Eater that “the non-partnered model is no doubt a bad experience for diners, drivers and restaurants. But our peers have shown growth — although not profits — using the tactic, and we believe there is a benefit to having a larger restaurant network: from finding new diners and not giving diners any reason to go elsewhere.”
During the pandemic, there’s been increased scrutiny on third-party apps and their relationship with restaurants, though, particularly when it comes to high fees. In an effort to address some of those concerns, Seattle passed a law in April 2020 capping delivery fees from those apps to restaurants at 15 percent, a policy that went statewide in November. And now a few delivery apps, including Doordash, are beginning to make more concessions to restaurants in 2021 — although it’s helpful to read the fine print.
Still, the lingering headaches of having restaurants listed on an app without much oversight hadn’t been addressed with local legislation up until this point. Popular Frelard deli Schmaltzy’s, for instance, ditched all third-party delivery services because of the service issues they’ve caused. And restaurateur Miki Sodos — co-owner of Bang Bang Cafe, Bang Bang Kitchen, and Cafe Pettirosso — shared some of the negative experiences she’s had with apps in consulting with council members on the Fair Food Delivery Act. She hopes the new law will make a big difference.
“Sometimes we end up with angry customers because they did not get the order they asked for, and it is completely out of our control. My menu and logo are my intellectual properties that I developed. No one should not be able to use them without my explicit permission. This is long overdue,” said Sodos in a statement.
- New Seattle Bill Would Require Delivery Apps to Ask Restaurants’ Permission Before Adding Them [ESEA]
- Council Bill 120092 [Seattle City Council Official]
- New California Law Raptures Thousands of Restaurants from Postmates, DoorDash, and Grubhub [ESF]
- Grubhub Hit With Lawsuit for Listing Restaurants Without Their Permission [Eater]