A person in a blue shirt signing a piece of paper

New California Law Requires Delivery Platforms to Disclose Fees and Give Workers Tips

California has passed a new law, the first of its kind, that’ll require food-delivery apps like DoorDash Uber Eats and Grubhub, to be more transparent.

More specifically, the bill, AB 286, which was signed into law by Gov. Gavin Newsom on Tuesday, will require delivery app platforms such as DoorDash Uber Eats and Grubhub to provide their delivery workers with all of their tips. Additionally, AB 286 forbids platforms from charging more for items than restaurants and requires them to provide a detailed cost breakdown of each order to help mitigate hidden fees.

“Gig companies have profited during the pandemic by keeping consumers and restaurants in the dark about the true cost of their services,” said California Assemblywoman Gonzalez said in a statement. “Now, small restaurants and their customers will know what they’re being charged upfront and get to see exactly how much is actually benefiting the restaurant.”

AB 286 is the latest attempt in a string of many efforts that local governments are taking to regulate the growing delivery platforms. During the height of COVID-19, several cities established temporary delivery-fee caps to help struggling restaurants stay open.

In 2021, both San Francisco and New York City have made those caps permanent. In retaliation, DoorDash, Uber Eats and Grubhub sued the cities.

DoorDash in particular has come under fire in the recent past as they’ve been accused of pocketing their delivery worker’s tips and got in trouble for it again when they faced scrutiny for not sticking to an agreement they made in 2019.

This past August, the city of Chicago filed lawsuits against DoorDash and Grubhub for using misleading and unfair business tactics that hurt restaurants, delivery workers and consumers during COVID-19.

As AB 286 was made a law, Newsom vetoed another bill that would have made restaurants responsible for additional fees like forwarded calls.

Newsom included in his veto message stating, “We have significantly increased oversight of food delivery companies in recent years.” The governor also mentioned that the delivery platforms have said they no longer charge restaurants simply for forwarding calls.

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