Seven principles guide public policy for third-party delivery
Long before the pandemic, delivery had grown increasingly important to success in the restaurant industry.
An online survey conducted by the Association at the end of 2020 found that 70% of customers ordered delivery, and 40% used a third-party service for their delivery. But for restaurants, delivery—including third-party service—can encounter problems and potential pitfalls that could be avoided with better collaboration.
After more than a year of working with operators around the country and the four major delivery companies, the Association has developed seven guiding principles to establish public policy on the issues.
“Until now, the relationship between restaurants and third-party delivery companies lacked a national framework to protect restaurants,” says Mike Whatley, vice president for State and Local Affairs for the Association. “These new principles, which center around permission and transparency, add consistency and structure that will benefit all restaurants.”
The seven principles are:
- Restaurants have a right to know and determine when and if their food is delivered.
- Customers should expect the same degree of food safety from delivery as they do when dining in a restaurant.
- Restaurants should be able to offer alcohol to customers through third-party delivery in a safe and legal manner.
- Restaurants deserve transparency on fees (including commissions, delivery fees, and promotional fees) charged by third-party delivery companies.
- Third-party food delivery contracts need contractual transparency, and issues surrounding fees, costs, terms, policies, marketing practices involving the restaurant or its likeness, and insurance/indemnity should be clear.
- Sales tax collection responsibility must be clear in terms of which party is collecting and remitting the specific sales tax to the appropriate authority.
- As a best practice, third-party delivery companies should offer restaurants access to anonymized information regarding orders from their restaurant that originate on third-party platforms.
While most of these are self-explanatory, Whatley explains several of these principles in more detail in a 15-minute “Quick Bite” podcast. For example, restaurants with liquor licenses rely on beverage alcohol sales to improve their bottom line.
Before the pandemic, restaurants couldn’t prepare a cocktail, cap and seal it, and have it delivered. Due to COVID-19, however, restaurants in 32 states and the District of Columbia can prepare cocktails for delivery or takeout service. Having a public policy principle in place that’s agreed upon by both third-party delivery companies and the Association encourages more states and locales to enact laws favorable to restaurants and restaurant delivery.
And while the last principle is a “best practice” as opposed to a public policy position, the four major delivery companies agree with the Association that restaurants should have access to ordering data generated on delivery service apps so that if customers complain that food is cold when it’s delivered, for example, the restaurant has a chance to work with the delivery company to fix the issue.
In the online survey, roughly 90% of delivery customers said they favor each of the seven policy proposals, indicating that they want as much consistency and transparency as restaurants when it comes to third-party delivery.
“This agreement represents an important first step in an ongoing dialogue between restaurants and third-party delivery companies about ways to improve our relationship going forward,” Whatley says.