Assembly Passes Lorena Gonzalez Bill to Require Fee Transparency from Food Delivery Apps

For immediate release:

SACRAMENTO – (Thursday, May 13, 2021) – Food delivery companies often take advantage of small restaurants by charging hidden fees, with some restaurants owners reporting they’ve lost money on these transactions. Today, Assembly Bill 286 by Assemblywoman Lorena Gonzalez (D-San Diego) to require companies like DoorDash, UberEats, and GrubHub to provide an itemized cost breakdown of each transaction to both customers and restaurants passed the Assembly with bipartisan support on a 55 to 8 vote.
 
"Small mom and pop restaurants and their customers have a right to know when they’re charged hidden fees on delivery orders so they can make informed decisions,” Assemblywoman Lorena Gonzalez said. “This bill ensures customers and business owners can understand what they're being charged, and delivery workers are actually receiving the full amount of their tips.”
 

David Singh, a restaurant owner for more than 27 years, says he made a tough decision during the pandemic to use GrubHub for deliveries at Mesa Pizza Co. in Santa Barbara to remain open. But soon after, Singh says he realized that he was actually losing money on every order placed with the delivery app.

Singh says after he placed an order to himself for one of his own pizzas, he was shocked to find out what he was being charged. He and his son updated their business website asking customers not to place orders on the platform, and instead call in their orders directly. AB 286 also would prohibit food delivery companies from charging higher prices for food than what the restaurant is charging its patrons.

Recently, Singh says he was able to hire his own delivery drivers again and end his contract with GrubHub. He says he supports AB 286 because of his experience and hopes to see more transparency from delivery companies about their fees in the future.

App-based delivery drivers have also voiced concerns over a lack of pay transparency, with many reporting having their tips stolen by food delivery companies. A 2019 report in the New York Times revealed DoorDash was using customer tips to subsidize workers’ base pay, which was followed by the company agreeing to pay $2.5 million to settle a lawsuit alleging DoorDash kept customer tips that were intended to go to their delivery drivers. AB 286 clearly states that delivery workers are always entitled to the full amount of the tips and gratuities added by the customer.
 
For questions or to schedule an interview with Assemblywoman Gonzalez, contact Mike Blount: Mike.Blount@asm.ca.gov