Calif. House passes bill to require delivery apps. to disclose fees

Written by James Shea

The California legislature is looking to require third-party delivery companies to provide an itemized cost-breakdown to both buyers, restaurants and delivery drivers. The bill recently passed the assembly and is being taken up by the Senate.

The bill is sponsored by Assemblywoman Lorena Gonzalez, who helped pass a bill that required third-party apps. to have an agreement with a restaurant before listing businesses on their websites. That bill was done in response to apps. listing restaurants without their permission.

The current bill tries to bring some transparency to the process. Both restaurant owners and customers have complained about the opaque nature of fees from third-party delivery companies.

“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,” Gonzalez said. “This bill ensures customers and business owners can understand what they’re being charged.”

David Singh, who owns Mesa Pizza Company, started to use GrubHub for deliveries during the pandemic, but soon realized he was actually losing money on every order. Singh, as a test, placed an order to himself for one of his own pizzas and was shocked to find out what he was charged. In response, Singh hired his own delivery drivers and has thrown his support behind the bill.

It passed the Assembly by a margin of 55-8. The bill also brings transparency to gig delivery drivers. The bill requires third-party delivery companies to give the entire tip and gratuity to the drivers.

The bill is part of a larger fight between delivery companies and the state legislature. The legislature passed a bill last year that required gig delivery drivers to be classified as employees. The delivery companies sponsored proposition 22, which kept the drivers as contract employees. Voters approved the proposition in November.

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