This legislation is expected to significantly benefit local businesses, particularly restaurants, by safeguarding their margins against excessive fees charged by third-party delivery platforms. The bill aims to alleviate financial pressure on merchants who have increasingly relied on these services, especially in a post-pandemic world where digital ordering has become essential. Supporters argue that the measure enhances fair competition in the food delivery market, allowing smaller establishments to thrive alongside larger chains that historically dominate the online ordering space.
Summary
House Bill 1266, proposed by Rep. Maurice A. West, II, amends the Fair Food and Retail Delivery Act to establish a fee cap for third-party delivery services. Starting January 1, 2024, these services will be prohibited from charging retailers more than 15% of the purchase price per order through their digital networks. The bill also stipulates that third-party delivery services must offer merchants the option of core delivery services—defined as services that make the merchant discoverable and perform order deliveries—at a capped fee without requiring additional purchases. Furthermore, delivery services are obligated to notify affected merchants of these options by November 1, 2023.
Contention
While the bill garners support from many in the restaurant sector, there may be concerns among delivery services regarding revenue implications. Advocacy groups and lobbyists associated with third-party platforms might argue that such restrictions could hinder their operational flexibility and limit their ability to offer varied services to merchants. Critics may also point out that while the fee cap is meant to protect consumers, it could lead to adjustments in service quality or availability as delivery companies adapt to the new financial constraints. Thus, the bill represents a balancing act between consumer protection and service provider sustainability.
Requires third-party food delivery services and third-party grocery delivery services to provide the ability to include a gratuity at the same point in the online order process when the underlying order is placed; provides that customers shall not be required to pay a gratuity; provides that third-party food delivery services and third-party grocery delivery services shall not reduce the compensation of any worker as a result of gratuities; establishes penalties for violations of such provisions.
Requires third-party food delivery services to verify that limited-use motorcycles operated by workers in the course of making deliveries for such third-party delivery service are legally registered; requires that a third-party food delivery service shall not sell, share, or allow access to such information.
Requires third-party food delivery services to verify that limited-use motorcycles and motor vehicles operated by workers in the course of making deliveries for such third-party delivery service are legally registered; requires that a third-party food delivery service shall not sell, share, or allow access to such information.
Prohibits unauthorized placement of merchants on advertising platform order interfaces, and would prohibit third-party restaurant reservation services.
Prohibits unauthorized placement of merchants on advertising platform order interfaces, and would prohibit third-party restaurant reservation services.
A BILL to amend and reenact §§ 59.1-530 and 59.1-531 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 59.1-531.1, relating to gift certificates; international transactions; fraud reports.