“If the driver is a contractor with respect to the restaurant, the restaurant’s liability is greatly reduced—but so, too, is the ability of the restaurant to direct the conduct of the driver,” says Jonathan Mazer, who specializes in litigation around independent contractor issues at New York law firm Schlam, Stone & Dolan LLP, where he is a partner. “When the drivers are contractors, each element of control is dependent on the agreement between the driver and the party dispatching the driver. Depending on what specifically the restaurants seek to control, one approach is not to impose rules, but to offer incentives.”
The legal waters are murky when it comes to the rules on third-party delivery drivers and who bears the responsibility and liability when there are issues. Workers in the gig economy are labeled as “independent contractors,” meaning they don’t receive overtime, health insurance, reimbursement for business expenses (gas, tolls, etc.), or a minimum wage.
However, many drivers are filing lawsuits alleging misclassification, citing that they are often told when and where to report for shifts and await deliveries and how to dress, among other demands.
In 2017, DoorDash settled with almost 34,000 drivers to pay $5 million for misclassification. In 2018, a California judge ruled that Grubhub drivers are independent contractors, not employees.
“Employer liability depends on whether the delivery driver is an independent contractor or an employee. If the driver is an independent contractor, the main liability of the party who engaged the driver is to pay the driver according to the contract and otherwise comply with the contract with the driver,” Mazer says. “What recourse restaurants have against outside parties such as dispatchers and drivers depends largely on the contractual arrangements between these parties.”
This cloudy legal territory points to a need for the brands themselves to make changes to elements in the delivery process that they can control, as opposed to relying on increased driver control.
Coolgreens recently implemented a tamper-proof bag with a design that shows a customer when it’s already been opened upon arrival. The bag evolved from guest feedback in early 2019 across all of Coolgreens’ locations that reported incorrect orders and missing items. Rather than point the finger at the delivery service, Coolgreens saw an opportunity to shoulder the responsibility for making sure every order was arriving to its destination exactly as the recipient had ordered it. This not only protects orders, but also boosts customer trust in the brand itself.
Madlener says that since units started using the tamper-proof bag system, there has not been a single complaint of food missing or a wrong order.
“When a guest experiences friction, the likelihood of them returning plummets. The tamper-proof bag takes the friction away, so they don’t have to worry if the food is tampered with or holds an accurate order,” he says. “It allows us to build trust with our guests.”