California has passed a new law that significantly changes how food delivery platforms must handle refunds, customer service, and driver pay transparency.
The legislation, Assembly Bill 578, applies to major food delivery services, including Uber Eats, DoorDash, and Postmates, and introduces stricter consumer protections when orders go wrong.
Under the new law, food delivery platforms are now required to issue a full refund if an order is not delivered or if the wrong order is delivered, with limited exceptions.
What AB 578 requires food delivery apps to do
AB 578 mandates that platforms provide a full refund covering all charges, including taxes, fees, and gratuities, when an order is not delivered or is delivered incorrectly. The only exceptions are cases where the platform determines the customer was responsible for the nondelivery or finds evidence that a refund request is fraudulent.
If a gratuity was included in the original order, the platform must refund that amount to the customer without deducting it from the delivery driver’s pay. If refunding the tip through the original payment method is not feasible, the platform must offer an alternate refund option.
The law also addresses partially fulfilled orders. In those cases, platforms may only charge customers for the portion of the order they actually received. Any associated taxes, fees, or gratuities tied to undelivered items must be adjusted accordingly. Customers must also be given a way to modify a gratuity that was included before delivery.
Another major change requires food delivery platforms to provide access to human customer service. While companies may continue using automated systems to handle complaints, they must allow customers to promptly connect with a real person if those systems fail to resolve the issue.
New transparency rules for delivery driver pay
AB 578 expands existing disclosure requirements by forcing platforms to provide delivery drivers with a detailed breakdown of their earnings for each delivery. This includes base pay, tips or gratuities, and any promotional bonuses.
The law also makes it illegal for platforms to use tips to offset a driver’s base pay. Any gratuity designated by a customer must be paid in full to the delivery driver and cannot be factored into the platform’s payment model.
Separately, platforms must continue providing itemized cost breakdowns to customers and restaurants, including food prices, fees, commissions, and tips associated with each transaction.
