- Eli Richardson
Food Delivery Services Face Regulation
Food delivery services DoorDash, GrubHub, and UberEats experienced rapid growth with the increase in demand for their products brought about during the pandemic. Their growth has brought conversation and regulation about how these companies do business.
In Chicago, the city sued GrubHub and DoorDash on the grounds of how the companies listed their fees to customers and the mistreatment of restaurants. An example of this being how specific restaurants were being listed on these delivery apps without giving their consent to Grubhub or DoorDash. An additional example, California wants to make it regulated so food delivery apps need to disclose to customers how much these specific companies and delivery drivers are actually getting paid compared to the restaurants profit on their orders.
Delivery companies have been trying to compensate for new regulations such as the one in California as they are also running into commission caps. The caps are on how much restaurants pay them for orders through their service in high population cities. The response to commission caps has been new in the app fees for consumers as delivery services try to earn back capped revenue that they say goes towards costs like driver pay and customer service.
As these lawsuits and regulations play out the defendants, DoorDash, GrubHub, and UberEats are losing potential revenue, while the plaintiffs, major cities, feel they are sticking up for restaurants being charged predatory commissions or losing goodwill through poor customer satisfaction with orders. With the pandemic continuing to impact the world and the convenience of these apps orders are up but so are the costs for consumers.