On New Year’s Day, a new Texas law went into effect designed to protects restaurants from predatory practices by third-party delivery services, according to Austin.Eater.com.
The measure, which was signed into law by Gov. Greg Abbott last summer, prohibits municipalities and counties from creating rules that would hinder agreements between restaurants and the services, the report stated.
Proponents say the legislation provides transparency protections to customers and restaurants as the industry recovers from the impact of the pandemic, according to the report.
The measure protects restaurants by prohibiting third-party delivery services such as Uber Eats and Grubhub from using an eateries’ trademarks in a way that makes it seem like the restaurant endorses the service, the report stated. It also outlaws third parties to charge restaurants delivery service fees unless they have a signed agreement with the restaurant to do so.
The legislation provides that if a restaurant requests to be removed from the listings of the third-party delivery service, it must do so within 10 days, according to the report. It also calls for a clear way for customers to express concerns about an order directly to the delivery service.
The law has teeth. A restaurant can sue a third-party delivery service if it violates any of the terms outlined in the law, the report stated.
The bill was backed by the Texas Restaurant Association (TRA) and third-party delivery apps including Uber Eats, DoorDash, Grubhub and Favor, according to the report.
Numerous surveys have shown the pandemic has been a boon for take-out restaurants and third-party delivery apps, as customers stayed away from restaurants due to safety concerns.
Still, the apps charge high fees for their services, something restaurants describe as a predatory practice when small businesses are already suffering, the report stated.