SAN DIEGO – A bill introduced this year by San Diego lawmaker Lorena Gonzalez requiring greater price transparency from food delivery apps is headed to Gov. Gavin Newsom’s desk.
The bill, known as AB-286, will be considered by Newsom after it was approved by the California State Assembly in a vote Wednesday with a majority of the State Senate voting in favor of it last month. If signed into law, the legislation would require delivery platforms such as GrubHub and Uber Eats disclose to customers and restaurants an itemized breakdown of fees charged in transactions and allow restaurants to set the prices of food and drinks sold through the apps.
Gonzalez, who represents the 80th California Assembly District, said she wrote AB-286 in an effort to hold third-party delivery apps to a higher standard.
“DoorDash got caught stealing drivers’ tips last year and was fined in California,” Gonzalez told FOX 5 on Thursday, “and we just want to make sure it’s very clear that when an individual gives a tip, that the driver receives that on top of any other pay that they’re owed.”
Like many, Gonzalez utilized these delivery apps at the height of the pandemic, not knowing the fees that ultimately were assessed to locally owned restaurants.
“It was convenient and nice, but we also didn’t know how much the restaurants were paying, sometimes up to 30%” she said. “For our favorite restaurant, or we really worry about them getting back on their feet, knowing that they’re paying that much may convince us to go in person or pick it up and realize that has a real effect on these community restaurants as well.”
It passed the California legislature as consumer, restaurant and government pushback against those third-party platforms grows. In January, San Diego Mayor Todd Gloria signed an executive order capping the fees third-party apps can charge local businesses in a push to help restaurants during the pandemic.
But in a statement, Geoff Vetter, spokesman for the Protect App-Based Drivers & Services Coalition, criticized AB-286.
“AB 286 is a poor effort to harm the app-based delivery industry, creating redundant requirements and seeking to disclose the terms of private business-to-business contracts,” Vetter said. “This bill will not improve transparency, does not benefit consumers, and has no support from any segment of the industry.
“Lawmakers ought to focus on supporting businesses as our state recovers from the pandemic, rather than adding punitive bureaucratic requirements that won’t benefit anyone.”
Several San Diegans told FOX 5 Thursday that they’re in support of AB-286 for a variety of reasons:
- “I think it’s a great opportunity for people in the industry to really know what they’re earning,” one man said.
- “At the end of the day, the drivers deserve what they work for,” another man said, “rather than certain companies.”
- A third man said: “I feel like it’s good for them to know how much the driver is getting and how much the business is getting.”
Gonzalez said that the bill could give restaurants and consumers more peace of mind with each dollar spent.
“That’s only fair,” she said. “As consumers, whether we’re buying a house, a car, whether you’re getting taxed on a receipt you like to know, ‘Oh, this much is taxed and that’s going to the government and this much goes to the store,’ this is just an extension of those types of purchases.’”
Newsom now has 30 days to sign AB-286 into law.