Feb 12, 2020 - Economy & Business

California bill targets food delivery companies amid gig economy pressure

Illustration: Aïda Amer/Axios

The California lawmaker behind the controversial law making it harder to classify workers as contractors has proposed a new bill to prevent food delivery companies from offering drop-offs from restaurants that have not signed up and requires they share customer data with restaurants that do sign up.

Why it matters: State governments are turning up the heat on gig economy companies.

The big picture: Like her new labor law, California Assemblywoman Lorena Gonzalez's new bill would directly curtail a common practice among these companies.

  • In October, GrubHub told investors it would begin to provide delivery of meals from restaurants that have not signed up for its marketplace, a move it said became necessary to compete with rivals that already do this.

Details: The bill prohibits food delivery services from offering food unless a restaurant has signed up.

  • And for those who do sign up, they will be able to get data about customers, including their email addresses, telephone numbers, delivery addresses and history of orders from that restaurant.

Go deeper: The gig economy hits roadblocks from state-level regulators

Go deeper

Uber, Postmates lose attempt to halt new California gig worker law

Photo: Justin Sullivan/Getty Images

A federal judge in Los Angeles denied a request by Uber, Postmates and two drivers to halt the enforcement of California's new law that codifies strict requirements for classifying workers as independent contractors.

Why it matters: This is a major blow to the companies and drivers in the case, as they were hoping to pause the application of the law while they sue the state to get it overturned. The law went into effect on Jan. 1.

Go deeper:

Betting on the future of breakfast

Illustration: Aïda Amer/Axios

America's most popular chains are spending millions and hiring thousands in the battle for the growing breakfast market.

The big picture: Restaurants are betting that expanding into the morning meal could turn into a windfall. Americans ate 102 billion breakfasts last year, per the research firm NPD Group — and breakfast is the only time of day that restaurant foot traffic in the U.S. is growing.

Uber's AB5-related changes haven't been great for California riders

Photo: Smith Collection/Gado/Getty Images

Prices and wait times have gone up for Uber passengers since the ride-hailing began making changes last month because of a new state law that makes it harder to classify workers as independent contractors, Uber CEO Dara Khorowshahi told analysts on Thursday.

Why it matters: Uber and other companies like Lyft, Postmates, Doordash have aggressively pushed back on the new law, known as AB5, as it threatens their business models.