Legislation passed by New York City’s city council will be a hard bite to swallow for food delivery apps and their customers alike.
Sponsored by Councilman Keith Powers, the new consumer data bill requires third-party delivery services, like Grubhub, DoorDash and UberEats, to hand over customers’ names, phone numbers, email addresses and delivery addresses to the restaurants they order from upon the restaurant’s request, provided that the customer consents. This is a marked improvement on the bill’s original draft, which raised serious consumer privacy concerns as it didn’t give customers the option to opt out, didn’t require that restaurants themselves request the data, and allowed restaurants to sell the data to third parties. However, it could nonetheless make life in the Big Apple more difficult by undermining delivery services, which may be forced to raise prices for customers.
Delivery services are essential — they served millions of Americans during the pandemic, provided jobs to countless others, and helped keep the city’s eateries in business. And their own business models rely on a combination of fees for each order processed as well as retaining data, which they use for marketing and optimizing customer service. Forcing these apps to hand over this data — essentially turning them into free referral services for restaurants — would force them to raise prices to compensate for their lost advantage- especially since many of these companies already run at a loss. And by driving up prices and hence deterring customers, the bill would harm restaurants too. Especially smaller or new ones that rely more on these apps to generate brand awareness. Delivery services already provide immense value for restaurants by taking care of delivery logistics, handling payments and bringing in new customers.
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