NYC Introduces Bill To Require Restaurant Aggregators To Share Customer Data

In-restaurant dining may be coming back, but online ordering is not going anywhere. In fact, PYMNTS research from the most recent edition of Delivering On Restaurant Rewards, created in collaboration with Paytronix, finds that 92 percent of all vaccinated restaurant customers say they intend to keep ordering online at least somewhat as often as they do now. As online ordering only continues to grow, major restaurant aggregators are seeing revenues soar, suggesting that the difficulties these services pose for restaurants will only become more pressing in years to come. Now, New York City has proposed a solution to one of these key challenges — the sharing of data.

A newly-introduced New York City Council bill would require restaurant aggregators to share customer data with restaurants, reports Restaurant Business. The bill, proposed by Council Member Keith Powers on Wednesday (May 12), was introduced to the city’s Committee on Consumer Affairs and Business Licensing. The bill, Introduction Number 2311, would mandate that third-party food delivery services, “share certain customer information with restaurants with whom that customer is placing a food or beverage order,” including “the customer’s name, phone number, e-mail address, delivery address and the contents of their order.” Additionally, the bill’s summary states, “the third-party food delivery service could not prevent the restaurant from marketing to the customer using that information.” The requirement would go into effect 60 days after the passage of the bill.

The NYC Hospitality Alliance, which represents the city’s restaurant and nightlife establishments, “led the fight” to get the bill introduced, according to the group’s statement. The group has also been active, since the start of the pandemic, in pushing for delivery fee caps and in calling attention to the financial burden that the past 14 months have placed on the city’s restaurants.

“This legislation is so important because it removes a major barrier certain third-party delivery companies place between restaurants and their customers, by enabling them to directly manage their relationships with their customers, offer them deals, market to them, and more,” the Alliance’s statement reads. “We commend Council Member Keith Powers for sponsoring this legislation and we will now advocate to get it passed into law.”

The data sharing issue is key, driving many restaurants to seek out alternatives to the traditional third-party model. Aggregators’ retention of the data at best deprives restaurants of the opportunity to develop a relationship with their customers, and at worst can have more serious consequences for restaurants.

As Olo CEO Noah Glass predicted to Karen Webster in 2019, “Looking around the corners a little bit, it seems inevitable to me that, with all of [the aggregators’] data on what consumers like and want, they have built the perfect path to opening their own ghost kitchens and private-label brands to serve up to consumers who order through their platform[s].”

In fact, some aggregators have already started doing this.

DoorDash and Grubhub have spoken out against the proposed NYC bill, framing it as an issue of consumer privacy. It is worth noting that both of these aggregators offer products that provide restaurants access to this same customer data.

“DoorDash is committed to protecting user data and privacy and cannot support efforts to force delivery platforms to share customer data without customer consent,” said a DoorDash spokesperson to Crain’s New York of the bill.

“We believe in the principle that restaurants should have the data to build relationships with their customers, which is why we launched Grubhub Direct to help restaurants acquire and market to their own customers,” a Grubhub spokesperson told Restaurant Business. “But we’re committed to the privacy of diners who use Grubhub, and this proposal would force an unprecedented weakening of consumer privacy protections.”

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