UPDATE: After nail-biting legislative uncertainty, Georgia consumers who use third-party food delivery services such as GrubHub or UberEats will soon have closer scrutiny of those services. Last-minute provisions regulating the food-delivery service industry were added during Sine Die to HB 528, which the governor signed into law in May. Terms between consumers and online merchants must be “clear and conspicuous” to reduce deceptive and unfair trade practices. The law takes effect January 1, 2024.

Third-party delivery services — those folks who deliver your favorite restaurant takeout to your home — could face greater regulatory scrutiny under a bill set to be introduced in the state Senate on Monday.

 

The bipartisan Senate Bill 34 would require food delivery services such as DoorDash, GrubHub and Uber Eats to have contract agreements with restaurants. It also would require drivers to transport food in thermal containers, and it would ban smoking and pets in drivers’ vehicles while transporting customers’ food.

“As new technology and industries emerge, it’s incumbent on us as policymakers to look to see if there’s oversight needed and we think these reasonable oversights are warranted,” Sen. Elena Parent, D-Atlanta, one of the co-authors of the bill, told State Affairs on Thursday.   

Parent chaired a five-member Senate study committee last year looking into business practices of online food delivery services. The other committee members are sponsors of the legislation. They are Sen. Frank Ginn, R-Danielsville; Sen. John Albers, R-Roswell; Sen. Harold Jones II, D-Augusta; and Sen. Sally Harrell, D-Atlanta.

What’s Happening

Third–party food delivery apps are lifesavers for the estimated million of Georgians who rely heavily on them, especially during the pandemic when people stayed home to avoid infection, and many restaurants, bars and pubs closed their doors to indoor dining.

But in recent years, a raft of legal and public health safety concerns prompted a bipartisan group of state lawmakers to seriously consider regulating the $250 billion-plus food-delivery app market. 

Lack of regulation in the food delivery environment has enabled third-party apps to list restaurants on their sites without the restaurants’ permission or knowledge, charge high delivery fees and allow drivers to operate without much guidance on or accountability for proper procedures, say critics.

While the Georgia Department of Public Health inspects restaurants and other eateries and can shut them down if they fail to follow state regulations, oversight stops once a third-party delivery driver picks up an order.

“It’s like the Wild West,” Karen Bremer, president of the Georgia Restaurant Association (GRA), told State Affairs. The association represents about 22,000 restaurants. 

The Senate Study Committee on Food Delivery Apps held hearings last year with members of the public, restaurant owners, the restaurant industry association and state environmental health officials as well as representatives from third-party delivery apps. The committee issued its final report in November.

During the hearings, senior representatives from Uber Eats and DoorDash told legislators their companies believe in keeping customers safe and noted that they have instituted guidelines for drivers to adhere to. Chad Horrell, senior manager of government relations for DoorDash, told committee members that the company requires drivers to undergo a background check and adhere to certain standards, for example.

DoorDash spokesperson Eli Scheinholtz did not comment on the legislation, but noted that in 2021, some 321,200 DoorDash drivers, referred to by the company as “Dashers,” made deliveries from 18,500 merchants in Georgia, earning an average of $20 per hour.

Attempts to reach representatives from Uber Eats were unsuccessful. An Uber Eats representative said during the committee hearings that the company partners with 14,000 merchants and restaurants in 155 cities and municipalities in Georgia.

Despite some complaints, convenience rules

Food delivery apps have been in the U.S. since the mid-1990s, starting with a company called World Wide Waiter, now known as Waiter.com.  The field has since mushroomed into a $250 billion-plus industry dominated by DoorDash, Grubhub and Uber Eats which account for 80% of the market. 

An estimated 1 million Georgians use food delivery apps.

For most, it’s all about convenience. 

For Gertha Coffee, that convenience  runs about $1,000 a month. That’s how much the Doraville retiree pays to have groceries and takeout from her favorite Japanese or other Asian restaurants delivered to her home. “They tell me how far they are from my house, [they tell] when they’re here and please be respectful. Open your door with a mask [on],” Coffee told State Affairs. If there’s any mixups or botched orders, she said she’s quickly refunded. 

“It’s worth the cost,” said Coffee. “I don’t have the energy to drive or cook.”

The rise in prominence of food delivery apps in Georgia, as in other parts of the country, occurred under the regulatory radar and without the public’s full understanding or knowledge of what takes place with their food once it’s handed off to third-party delivery services.

The Restaurant Association’s Bremer said the lack of regulation is particularly disturbing when factoring in other food delivery segments such as local private chefs who work out of their homes and use third-party delivery apps to deliver their meals.

“I can make tuna fish casserole in my house with my cats crawling around on the counter and have DoorDash come and pick it up and take it to you,” Bremer told  the study committee.

Restaurateur Quynh “Q” Trinh offers a unique, more forgiving perspective.

Owner of We Suki Suki, a Vietnamese restaurant in East Atlanta along with a food hall called Qommunity, Trinh fills orders via third-party delivery apps, and she also personally uses them. She said she spends about $200 a month ordering takeout online. As a customer, she’s had the occasional mishap like a few weeks ago when she didn’t get the mussels she ordered in one dish. And then there’s been the occasional call to her restaurant from irate customers who didn’t get a meal they ordered through an online app.

“We make the food and once it’s in the delivery person’s hands, there’s nothing else we can do about it,” Trinh told State Affairs.  “I’ll be honest with you, having these delivery services was a godsend during the pandemic because people didn’t want to go out.” 

Trinh wonders just how effective state-mandated regulations will be. “Checks and balances can only go so far because you’re regulating the person,” she said. “Unless you’re sitting next to that person or you put cameras on these people, how are you going to regulate that?”

Food delivery isn’t for the squeamish

One in 4 delivery drivers admitted to sampling a customer’s food order, according to a survey by U.S. Foods, which supplies restaurants and food service operators with food. The organization surveyed 1,518 adults in May 2019 who use food apps, along with 497 delivery drivers.  

The survey also found that 34% of customers had a delivery driver who stayed in the car and handed their food to them through the window, 17% had a driver drop the food outside and 29% had a driver who refused to bring the food all the way to their door.

One Atlanta politician told Bremer about the time he received an order from a third-party app where half of his fries had been eaten. Another metro Atlanta man recalled a delivery driver leaving his pizza on the sidewalk outside his apartment building.

State Affairs spoke with a half dozen people who use food delivery apps regularly. Overall, they were happy with the service, although there were times when orders came up short. When that happened, the companies refunded them.

“Sometimes they might forget a sauce or an extra packet or something, but nothing really terrible,” said Kim LeStrange, who spends about $300 a month ordering Chipotle, Mexican food and takeout through Uber Eats. The 24-year-old works in sales for a digital marketing company and has been using delivery apps for about three years.

Parent began hearing complaints from restaurants about third-party apps during the early days of the pandemic. 

“Restaurants were in this catch-22 where it’s like, ‘We can’t live with them but we can’t live without them,’” Parent, who is also Minority Caucus Chair, recalled. 

Peter Dale, owner of the Maepole restaurant and Condor Chocolates in Athens, told the study committee last August that Uber Eats and DoorDash charged a 30% and 25% markup, respectively, to deliver food from his establishments. About half of his business now comes from online orders and most of those orders are made through third-party apps, not directly to his business. Dale estimated that customers pay, on average, about 20% more for food delivered by the online food apps.

For 25-year-old single mom Shelby King, being an Uber Eats driver enabled her to “make my money and be my own boss.” King earned about $1,000 a month delivering meals. “I like the freedom of it,” King, who lives with her young son and parents in Rex, told State Affairs.

King said while she’s never seen drivers tampering with customer orders, she’s  “heard of it.” 

Reports of drivers tampering with customers’ food has prompted many restaurants now to send food in tamper-proof bags or containers, Bremer of the restaurant association said. “More and more restaurants are using tamper-resistant packaging because of all of the issues surrounding meal delivery,” she said. 

As a driver, King had few problems working for Uber Eats. But as a customer, she said she’s had problems with competitors’ delivery practices. “I’ve had people [drivers] steal food from me,” she said. “If you don’t post a picture, it’s so easy [for them to steal].” One deliverer, she said, left her food hanging on her mailbox.

At times, King said she’s had to take her 3-year-old son with her while making deliveries. When she does, she has another adult in the car to supervise him. She said she would comply with any laws that Georgia passed banning children from vehicles during deliveries.“It makes sense,” she said. 

She’d also welcome laws requiring third-party food delivery services to provide thermal bags for delivery and to replenish them every few months for health and safety reasons.

Keye Lowery, a Newnan resident who has been using DoorDash several times a month for the last few years, said the government should step in to monitor the services.

“I can’t imagine why people would tamper with your food or your delivery,” Lowery told State Affairs. “[But] there should be some established guidelines or consequences if they do something to your food or to items you’ve ordered.”

Georgia latest to move to regulate third-party delivery apps

Georgia isn’t alone in trying to impose regulations on third-party food delivery apps.

Ten states and the District of Columbia now require companies to get consent from restaurants to deliver food. In Iowa, pets, kids and smokers are banned from riding with the driver of a third-party food delivery service. 

The attorney general in Washington, D.C., sued Grubhub last year, saying the company charged excessive fees and used false advertising and old restaurant prices. Chicago also sued Grubhub and DoorDash for its practices and San Francisco accused delivery companies of violating California law by classifying drivers as contractors. 

In Georgia, Parent said state lawmakers are working to keep up with technological advances reshaping the restaurant industry and ultimately Georgian’s eating habits.

Read the Georgia Senate Study Committee on Food Delivery Apps’ final report here. 

Tell us about your experience with online food delivery services. You can reach Tammy Joyner on Twitter @LVJOYNER or at [email protected]. Joyner is State Affairs’ senior investigative reporter in Georgia. A Georgia transplant, she has lived in the Peach State for nearly 29 years.

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Header image: An Uber Eats food delivery driver cycles along a busy road. (Credit: shopblocks)