Proposed RI bill would fine delivery providers for listing non-partnered restaurants

UPDATE, Feb. 12, 2020: This story has been updated with additional comments from DoorDash.

Dive Brief:

Rhode Island legislators are considering a bill that would ban third-party delivery apps from listing non-partnered restaurants on their sites without written consent, according to WPRI.com.
If passed, it would fine these delivery providers $1,000 each day the violation occurs, and any merchant can bring action against the provider in superior court to recover actual damages or up to $5,000, whichever is greater, the bill states.
The bill came about after the Rhode Island Hospitality Association received several complaints from restaurants that third-party delivery apps were using their restaurant names without their consent.

Dive Insight:

Rhode Island is so far the first state to consider this type of legislation, but considering all of the top four delivery providers are listing non-partnered restaurants on their sites, other states or local governments could follow, especially since backlash has grown over the last couple of months among restaurants.

Pushback from customers and local governments has already changed company policy at Grubhub and DoorDash. Grubhub revised its phone policy nationwide in January following criticism from the New York City Council late last year over restaurants receiving phone charges that weren't related to orders. The delivery company now allows for a longer look-back period on phone charges and customers now have to press #1 or #2 depending on whether they want to place an order or ask a question of the restaurant, respectively. DoorDash changed its tipping policy after customers criticized the practice. Originally, tips went toward the total cost of the order instead of entirely to the driver. Tips now go entirely to the driver and don’t supplement the delivery cost.

Non-partnered listings became a part of Grubhub's growth strategy during Q4 2019, when it added 150,000 non-partnered listings. Grubhub turned to this strategy to increase its supply of restaurants and to drive more delivery orders to local restaurants, a Grubhub spokesperson told Restaurant Dive in an email. Competitors had been growing their marketplaces with non-partnered listings for years, Grubhub said.

"Our mission since we were founded in 2004 has been to connect hungry diners with great, local restaurants and drive more takeout orders to restaurants," a Grubhub spokesperson told Restaurant Dive in an email. "We're fully committed to working with local policymakers on topics related to our business."

A DoorDash spokeswoman told Restaurant Dive in an email, "There are a variety of ways merchants can choose to work with us, from formal partnerships to no-cost listings. We support legislation that ensures merchants have the ability to interact with us however best suits their unique business needs as we’ve found that this is the best way to empower those businesses and the local economies in which they operate. We look forward to working with legislators and other stakeholders to achieve that outcome."

Restaurants that don’t wish to be on Grubhub's marketplace can reach out to the company by emailing [email protected], and the company said it will make the necessary updates or remove them as quickly as possible. According to Nation's Restaurant News, restaurants on DoorDash’s platform that would like to update their menus or remove a listing can reach out to DoorDash by visiting its website. DoorDash honors every request to be removed from its site and does its best to immediately remove listings, said the DoorDash spokeswoman.