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Businesses Software

Delivery Apps Keep Adding Restaurants Without Their Consent (eater.com) 175

Several delivery services, including Postmates, Seamless, Grubhub, and DoorDash, are offering food from restaurants without their explicit permission. "The delivery apps pull up restaurant menus listed online, from which customers make their selections, and couriers working for the apps place orders on their behalf," reports Eater. "The process essentially inserts third-party apps as middlemen into a service many restaurants say they want control over, or wish to opt out of entirely." From the report: Recently, in a move to compete with the Postmates and Doordash model, Grubhub and Seamless adopted a similar policy, adding "non-partnered" restaurants to their platform. Starting a few months ago in some cities like San Francisco, Grubhub added restaurants without their permission based on local demand -- i.e., searches -- for them. If Grubhub can demonstrate public interest in getting delivery from a particular restaurant, the plan goes, maybe restaurants will actually partner up. In a previous statement to Eater, a Grubhub spokesperson said the company has been adding non-partnered restaurants "so we will not be at a restaurant disadvantage compared to any other food delivery platform." "The non-partnered model is no doubt a bad experience for diners, drivers and restaurants," the spokesperson admitted. "But our peers have shown growth -- although not profits -- using the tactic, and we believe there is a benefit to having a larger restaurant network: from finding new diners and not giving diners any reason to go elsewhere."

According to a report by the Counter, Grubhub has registered more than 23,000 web domains for real restaurants, creating "shadow pages" that often compete with restaurants' real websites. If its shadow pages show up higher on Google search results than a restaurant's own site -- or are added by Google's listings themselves -- it's an advantage for Grubhub, since the delivery service charges higher fees to restaurants when it can claim it helped customers discover them. Grubhub argues that its contract with restaurants includes a provision reserving the right to purchase domain names to set up "microsites" on their behalf. In a similar maneuver, Grubhub also sets up new phone numbers for restaurants with whom they have contracts, displaying those numbers instead of the restaurant's direct lines on their websites and apps. Grubhub then forwards those calls to restaurants and charges fees for calls that lead to orders. Some restaurants, like Tiffin Indian Cuisine in Philadelphia, claim that Grubhub charges fees for every phone call, many of which don't result in orders, or are just calls to check in on existing orders. Tiffin's owner filed a class-action lawsuit in in Philadelphia federal court seeking $5 million in damages; Grubhub disputes the restaurant's claims.

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Delivery Apps Keep Adding Restaurants Without Their Consent

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  • by TWX ( 665546 ) on Thursday January 30, 2020 @07:53PM (#59672984)

    If they're representing themselves as being that restaurant (phone numbers, websites) without affiliation, isn't that fraud?

    Nail 'em for fraud. Pretty simple to me.

    • First sale doctrine (Score:5, Interesting)

      by Immerman ( 2627577 ) on Thursday January 30, 2020 @08:27PM (#59673120)

      Not from what I've seen. They represent themselves as an independent food delivery service.

      And legally, I don't see that the restaurants have any legal grounds to complain - delivery service is buying food from them, and reselling it to the customer. And the right to re-sell goods as you see fit is well established legally. Even copyright has the first sale doctrine, which guarantees customers the right to re-sell copywrited material.

      As far as I can tell, restaurants' options are limited to complaining, refusing to sell takeout to delivery drivers (assuming their jurisdiction allows them to refuse service for any reason), and not selling take-out at all.

      • Hmm - or I suppose they could try the software/eMedia route - they don't sell you food, they sell you a non-transferrable license to eat the food they provide you.

        Of course, without copyright restricting what you can do, you don't actually need a license. Perhaps they can figure out how to install DRM in the egg rolls.

      • by Kitkoan ( 1719118 ) on Thursday January 30, 2020 @09:02PM (#59673218)

        And legally, I don't see that the restaurants have any legal grounds to complain - delivery service is buying food from them, and reselling it to the customer. And the right to re-sell goods as you see fit is well established legally. Even copyright has the first sale doctrine, which guarantees customers the right to re-sell copywrited material.

        Actually, it's been shown in court that you can't always sell something that you bought.

        In some cases, you need permission to sell a companies products. And there are court cases about this

        Chanel is suing multiple people for selling real Chanel products but they aren't authorized to sell the products.

        https://fashionista.com/2018/03/chanel-what-goes-around-comes-around-lawsuit-counterfeit-goods

        https://www.thefashionlaw.com/home/chanel-is-suing-an-ebay-seller-for-56-million

        Unilever is also suing Target over these kinds of things to:

        https://www.gcimagazine.com/marketstrends/channels/massmerchandisers/Unilevers-Dermalogica-Sues-Target-for-Unauthorized-Selling--501473682.html

        Companies do this so unauthorized people don't water down their brand. (A quick search for Doordash horror stories might give you an idea why these companies don't want their brand associated with these delivery companies)

        • All of those cases are attempting to sue the receiver of the "counterfeit" goods though. This case has a bit more merit because the restaurants at least know who is usurping their relationship with buyers instead of just trying to blame someone who they don't have any relationship to.

          • It helps to read the articles....

            From the first link:

            The filing points out that WGACA "purports to sell genuine Chanel-branded point-of-sale items including, tissue box covers, trays, and mirrors, which are not authorized for sale to the public by Chanel," and that Chanel "has explicitly refused WGACA's requests to enter" into an official relationship or affiliation.

            From the second link:

            In addition to not being an authorized seller of Chanel products, Chanel claims that Ladijinsky is selling âoeused goods, goods that were never intended for sale, and/or goods lacking any packaging or product information,â as well as âoetesters of Chanel cosmetics, including lip gloss power, and blush; unboxed fragrances and cosmetics; and even used fragrance items.â

            In both of the cases, Chanel isn't denying these are fake, they don't claim them to be counterfeit. In fact, Chanel states flat up "They are real Chanel products". They are just not being sold by an approved seller and/or aren't products in forms that they want sold in.

            Oh, and in the third link:

            according to the complaint, the company firmly controls the quality of the goods, selling only through authorized sellers or directly to customers. Agreements with authorized sellers prohibit diversion of the products to other resellers. Dermalogica alleges that Target received the goods from some of these authorized resellers, a violation of the agreements.

            Again, the company is pointing out the products are real, but they aren't an approved re-seller.

            • by dryeo ( 100693 )

              I'd guess they're using Trademark law to sue over using their name. Small restaurants names are seldom trademarked.

              • Really? At least in Oklahoma, every business had a trademark on its name just from incorporating with the state. I guess it varies state-to-state.
                • by dryeo ( 100693 )

                  Are restaurants usually incorporated? Is State trademark law different from Federal? I'm in BC and I see small restaurants with the same name in various towns and I don't believe they're related excepting in type of food though I could be wrong.
                  If they are trademarked,. it would be another legal avenue.

                  • by dcw3 ( 649211 )

                    Common for small businesses to TM their name in the US. Maybe the rules/cost are different up north?

                  • by dwywit ( 1109409 )

                    You'd have to be crazy to run a restaurant that wasn't legally distinct from you (the chef/owner/whatever).

        • Companies sue for things they aren't entitled for all the time. Ty v. Perryman put the kibosh on several of those types of claims.
        • by Aristos Mazer ( 181252 ) on Friday January 31, 2020 @01:24AM (#59673682)
          Except Grubhub is NOT reselling the food. It is a purchasing agent acting on behalf of the customer. That puts them in a whole different category of law. It is only reselling if they bought a bunch of meals and then went to find customers for those meals (literally, selling them again).
      • Exactly right. The restaurant in question has no right to intervene if I hire someone to buy and deliver food to me.

        This is about money and control the restaurants think they are owed and they are full of shit. Any place stupid enough to sue over this is going to get their asses handed to them by the court as long as the delivery service is making clear that they aren't affiliated.

        If the delivery service is pretending to be affiliated it's fraud like noted above and can be dealt with pretty easily. But even

        • What if you think you're calling the restaurant, but are actually calling a third-party who's taking a cut? i.e. you're unknowingly "hiring" someone who stole the restaurant's identity.
          • What if an asteroid slams into the planet tomorrow...

            We arent talking about what-ifs, sweetheart. We are talking about something thats actually happening.
            • by mwvdlee ( 775178 )

              Except that this appears to be exactly the thing they're trying to do. Creating a site to look like the restaurant's site but changing the phone number and not making clear they are a delivery service.

        • by stephanruby ( 542433 ) on Friday January 31, 2020 @01:24AM (#59673684)

          this is going to get their asses handed to them by the court

          And yet In-N-Out Burger seems to have won that battle. They sued DoorDash [cbsnews.com] in 2015. And note that they're no longer listed on Doordash anymore. They're not even on Postmates or GrubHub. I just checked.

          This is weird. Don't you think? Because if it was just just a logo issue, Doordash should just list In-N-Out without the logo.

          • Sometimes the threat of protracted legal fees, if you can't win in the long run is enough to get someone to stop doing something perfectly legal.

            Those companies probably made the decision that it's just easier (and a hell of a lot cheaper) to drop In-n-Out than fight and win the lawsuit. The $50 Million In-n-Out could have made them pay in legal costs was all the disincentive they needed and even if they won they'd never recoup that amount of money.

            Maybe you are young and don't realize it but people sue all

        • by Aereus ( 1042228 )

          What you say may be true in some cases, but often they present the listings on their delivery app in such a way to make people believe they are affiliated. And more importantly: They direct all complaints back to the restaurants, even when the issues were caused by the middleman service.

          eg: If they come in and order a pizza, then proceed to leave the box on the seat in the car for an hour before delivering it to the customer, the restaurant shouldn't be expected to give store credit for cold food.

      • They infringe on the restaurant owner's name, add tortious interference with a businesses operation, commit fraud by posing as the restaurant, and defame the restaurant.

        This is a lawyer's paradise. IANAL, but sounds like fraud to me, registering websites just to grab business, violating a business's desired customer relationship.

        I think the excrement will hit the air conditioning, and soon.

      • Or the restaurant could simply add a take-out fee, waved via a coupon valid once per day per customer and/or credit card. Coupons available at the take-out desk.

      • They could simply request an ID and the credit card used to avoid fraud while making it harder for the delivery service. What driver would want float a few hundred dollars while waiting to get paid? Or charge a higher delivery charge that is waived if you show them the coupon they emailed you. Make it a pain for the customer and the delivery services will drop you. Also put a warning on your menus that you take no responsibility for third party delivery problems.
        • This kind of strategy will result in lost sales and possibly angry customers who leave bad reviews, at least in the short term until (if) the delivery service unlists the restaurant.

          From the perspective of the customer, it looks like a restaurant that charges too much or that doesn't deliver. Most customers won't go searching for an alternative restaurant website before placing an order.

          The restaurant could put a flyer with the meal about the advantages of ordering directly; that might help for repeat custo

      • these services do not make it clear when they have a proper relationship with a company or not. And that's before we talk about phony listings where restaurant A is listed for delivery but the food comes from restaurant B.

        Also if they're scanning menus they'll run afoul of copyright laws (same as blockbuster did with video game manual scans).
      • by Sigma 7 ( 266129 ) on Friday January 31, 2020 @12:18AM (#59673600)

        This first sale doctrine doesn't apply here:

        > Grubhub has registered more than 23,000 web domains for real restaurants, creating "shadow pages" that often compete with restaurants' real websites.

        This is straight up trademark violation, cyber squatting, typo squatting, etc.

        • This is straight up trademark violation, cyber squatting, typo squatting, etc.

          Indeed. There's also issues on the rules of handling food. Maybe I can claim first sale doctrine on a McDonald's burger but then I'm in the restaurant business and that has all kinds of regulations on it from state and local governments. Buying a McDonald's burger and then claiming I'm a McDonald's restaurant selling this burger to someone else is just plain violations of trademark.

          Maybe companies like Grubhub can get around any violations of delivering food because they comply with any regulations on de

          • by dwywit ( 1109409 )

            "There's also issues on the rules of handling food."

            That's a good point. Who do I sue when I get sick from a meal delivered by one of these entities? If there's an audit trail from me to their fake restaurant or ordering site, I would be suing the delivery company.

            From what I can see, the restaurant has little to no control over the handling practices of the delivery company.

            The first case of suing for food poisoning is going to establish a precedent - it might put these delivery companies out of business.

          • Well, if you are claiming to du your resale under the "first sale doctrine", you can't claim it's "new". I'd like to see how it ends if any of those delivery services would go into the buisness of "used McDonalds burgers". "pre-owned" if you prefer... :-)

      • You're absolutely incorrect. A business can (and should, in most cases) decide who they will and will not sell to. The business that I work for, for example, won't serve people who carry guns. We choose not to because that's what the owner decides.

        There's absolutely nothing that says a restaurant must sell to anybody who has the money to buy.

        And, these websites are misrepresenting themselves as agents of the restaurants, so they should have their asses sued off six ways til Tuesday.

        But,considerin
        • by jabuzz ( 182671 )

          Oh there is, should a restaurant refuse to server a customer because say of the colour of their skin, or sex they will find themselves in very hot water very quickly. Basically if it's a "protected characteristic" you had better sell to them or else.

      • by Aereus ( 1042228 ) on Friday January 31, 2020 @03:37AM (#59673886)

        We had DoorDash do this with a restaurant I worked for. Customers claimed their site said we were "partnered" and they would deliver our food lukewarm, then directed all complaints for credits back to us. We blacklisted their phone number and told them to stop representing themselves as affiliated with us in any way. We had our own online ordering and their delivery bags were open-ended, so it's no wonder the food was cold by the time it got there.

      • by BKX ( 5066 ) on Friday January 31, 2020 @06:39AM (#59674190) Journal

        You're half right on there being nothing they can do. I run a restaurant and DoorDash used to call in takeouts to us everyday. The problem is that the people calling in were from India and could barely speak English and their procedures were ridiculous. They would call in their order, then make you repeat it back, then you'd tell them the price and they'd say to wait a few minutes for their customer to decide if that was good and hang up. Then they'd call back, say that the order was accepted, make you repeat the order back to them to confirm and then want to do a credit card over the phone, which is a pain the ass of and in itself. Finally, we'd make the order. Then, an hour later the driver would show up, and try to make you recook the food because they took too long to get there. Fuck that.

      • What is the delivered food is cold? The customer will blame the restaurant, not the delivery service (which may pick up an order 20 minutes after it's ready).

        I live in a walk-able neighborhood (dense urban, 10s of restaurants and bars). Every time I carry my pizza bag for a carry out order they ask me if I'm working for a delivery service (walking 4-8 blocks with hot food requires an insulated bag, except in summer).

        I always reply, "Yes, I'm delivering it to myself."

        The restaurants should handle deliver,

      • "Not from what I've seen. They represent themselves as an independent food delivery service.

        And legally, I don't see that the restaurants have any legal grounds to complain - delivery service is buying food from them, and reselling it to the customer"

        Louis Vuitton and their pals successfully forbid Amazon etc to do the same.

  • by nathrek ( 1548389 ) on Thursday January 30, 2020 @07:53PM (#59672990)
    The situation really can't continue for too much longer can it? None of them turning a profit and games like this going on which just pisses off customers and restaurant owners. Bets on which app collapses next?
  • by fahrbot-bot ( 874524 ) on Thursday January 30, 2020 @07:56PM (#59672998)

    Someone will shadow Grubhub, take orders, and place them with Grubhub. Grubhub will shadow them, etc... Pretty soon, everyone will be working for a shadow/ed delivery services.

  • Learn to Cook! (Score:4, Insightful)

    by Anonymous Coward on Thursday January 30, 2020 @07:58PM (#59673010)
    These delivery middlemen companies are starting to sound like scummy frauds.

    Most restaurants are about the atmosphere and service (in addition to good food), you can't get that with takeout. Might as well use your local cheap delivery joint for that.

    Or you know, learn to cook good meals for yourself and others. If you don't have time in life for things like that, well then I guess it sucks.
  • I'd swear I already posted to the same topic and it was on /.
  • It's certainly legal for me to hire someone to order food for me, pick it up, and deliver it. If I choose to do that it's between me and the courier and not the restaurant's business. Now if the intermediary poses as representing the restaurant then that's wrong (and a trademark violation). But if the intermediary correctly describes their business then they should be free to continue.
    • by GlennC ( 96879 )

      If you'd RTFA, or if you would have thought about it for more than a nanosecond, you would realize that there are restaurants that don't offer takeout, let alone delivery.

      • You would think that there would be food safety regulations regarding to-go packaging of restaurant food be performed by the restaurant, unless it was partially consumed by the customer on premise.

        IMHO the big problem with most delivery services even when they're working with the restaurant is that you're kind of likely to get food that's cold, poorly packaged and so on.

    • Now if the intermediary poses as representing the restaurant then that's wrong (and a trademark violation).

      That's the complaint.

      But if the intermediary correctly describes their business then they should be free to continue.

      I agree, but that's not happening here.

  • by SlashDotCanSuckMy777 ( 6182618 ) on Thursday January 30, 2020 @08:38PM (#59673170)

    Would the restaurant be liable?

    I mean, they didn't "sell it" to the customer. The delivery service did.

    • by fred911 ( 83970 )

      they didn't "sell it" to the customer.

      Hence, the consumer isn't the restaurant's customer. Therefore the consumer has no valid claim against the restaurant. The restaurant can't be held responsible for errors that may happen by those they don't employ as part of their business.

  • by Solandri ( 704621 ) on Thursday January 30, 2020 @09:01PM (#59673214)

    Grubhub has registered more than 23,000 web domains for real restaurants, creating "shadow pages" that often compete with restaurants' real websites. If its shadow pages show up higher on Google search results than a restaurant's own site -- or are added by Google's listings themselves -- it's an advantage for Grubhub, since the delivery service charges higher fees to restaurants when it can claim it helped customers discover them.

    That's not allowed. Under ICANN's Uniform Domain Name Dispute Resolution Policy [wikipedia.org], registering a domain with the intent to disrupt an existing business, confuse customers of that business into thinking that it's the business' actual site, or with the intent to sell the domain to the business, are all grounds for losing the domain (to be awarded to the business). This is a pretty open and shut case. The restaurants in question just need to file a complaint with ICANN, and they'll transfer ownership of the domains from Grubhub to the restaurant. If the restaurants wish to pursue Grubhub for damages, they can do so on grounds of fraud and trademark dilution.

  • I am not familiar with these services. So the article is saying: A delivery service charges the restaurant for phone calls they direct to them and they charge the restaurant a fee for an order. WTF, why doesn't the restaurant just NOT pay? Especially if I don't have a contract with them. What am I missing?? If GrubHub sends a customer my way so be it. If they order food for someone else that is on them I am not paying them for their service. Plus aren't they charging their customer a fee to order, pickup an

    • by Xenx ( 2211586 )
      The phone call charges issue is specific to restaurants that are contracted with GrubHub. I assume under the contract GrubHub has the legal right to use their own redirecting phone numbers and to charge the restaurants for their use. The problem comes down to a choice between what you believe is unfair billing practices, and losing whatever percentage of business comes from GrubHub.
  • by doubledown00 ( 2767069 ) on Thursday January 30, 2020 @09:56PM (#59673342)

    So if your restaurant is getting popular, Grubhub will approach you about "partnering" at which time you have the honor of paying them more for the privilege of having them deliver food to your customers.

    And if you don't want to "partner", then Grubhub will register a domain and create a shadow site with your menu and sell your food to their users anyway with the motivation of........driving more business to you and charging you for the privilege of having them deliver food to your customers?

    How is this any different from Joe Pesci walking into your business, grabbing you by the shirt, and yelling "Fuck you, pay me"?

    • by Xenx ( 2211586 )
      If the restaurant is not partnered with GrubHub, they're not charging the restaurant for anything. From what I can gather, it sounds like if the restaurant is partnered with GrubHub, the commission is paid by the restaurant. If the restaurant isn't partnered, those costs are paid by the user instead.
      • At the expense of having their name co-opted online, their menu stolen, and an intermediary taking phone calls and passing them through to you so they can claim "credit" (I think that came from a different article).

        I mean, so you're still "partnered" with them. They're still in your business. So what do I get for my money if I make it official?

        • by Xenx ( 2211586 )
          Oh, I agree with your sentiment. My point was GrubHub isn't charging non-partner restaurants money for anything. You mentioned them charging the non-partnered restaurant. Also, as an aside, you can have your restaurant removed from GrubHub. You just have to be aware it's there in the first place, so you know to request it.

          As for what you might get out of making it official, it just comes down to the sales. As I mentioned, the costs are heavier on the customer if you're not a partnered restaurant. If ther
    • by necro81 ( 917438 )

      How is this any different from Joe Pesci walking into your business, grabbing you by the shirt, and yelling "Fuck you, pay me"?

      Well, for one, at least I'd have the experience of meeting Joe Pesci, and have a neat story to tell my grandkids.

  • (1) Go to restaurant once.
    (2) Take paper menu or enter phone # from sit-down menu into your phone.
    (3) Call to order -- never deal with parasitic middlemen again.

    • These restaurants have take-out, but not delivery.

      You can take the menu home as much as you want, it's not getting you delivery without a middleman.

      In some markets taxi services have long offered this service. But you have to pay them.

      • These restaurants have take-out, but not delivery.

        All of them? I'd doubt that that Michelin-starred restaurant that somehow ended up in that list would have take-out...?

        And the article title even says so "We Don’t Even Do Takeout"

  • by Wizardess ( 888790 ) on Friday January 31, 2020 @01:09AM (#59673662)

    These services and others take orders for food from restaurants that no longer exist. Look up "Haandi Cucamonga". You will find people selling food purportedly from a restaurant that has been closed for several years now. Do Not Ever Order Food Online from a third party delivery service. You may think you got lucky. Probably the food is coming from GORK sources.

    {^_^}

    • A few days ago, there was an article [slashdot.org] about Seemless and Grubhub listing a restaurant that didn't do takeout or delivery. What's more, it listed items that weren't on this restaurant's menu. Who knows what pop-up kitchen was cooking those dishes? It certainly was't the restaurant, but any bad food would hurt that restaurant's reputation.

      At this point, I wouldn't use Grubhub or any of those other third party food delivery services. If I want takeout from a restaurant, I'll call the restaurant directly, order

  • At a Vietnamese restaurant, a driver came in and berated the restaurant owners for being slow with cooking the food some asshole ordered online. Asshole customers. Asshole drivers. No thanks.

    • by dcw3 ( 649211 )

      Or, maybe the restaurant was slow, and should have been told off? Your anecdote is just that, a one off, and examples of shitty people are everywhere, so how is it relevant?

  • Not uncommon (Score:5, Informative)

    by uvajed_ekil ( 914487 ) on Friday January 31, 2020 @03:29AM (#59673876)
    This happened to my restaurant. Grubhub and Doordash added us, both around the same time. At first we couldn't understand why were getting call-in orders from people who seemed to have no clue what they were ordering. Then the complaints started: people claiming their food was squashed or cold, items were missing or portions looked smaller than usual, and orders arrived late. That was all unusual to us, and we didn't realize what was going on until people complained about slow deliveries - when we didn't offer delivery. It was a nightmare.

    Doordash removed us immediately upon request. Grubhub tried to talk us out of it, then ignored our request until we threatened legal action due to their unauthorized use of our trademarks. That got their attention. I've spoken to reps from both recently, who naturally want us to "partner" with them. One guy, when I told him why we weren't interested, said he was tasked with cleaning up their launch issues", and acknowledged that their delivery personnel operated without supervision. I told him they'd already burned the bridge before we'd even been given a chance to cross it.
  • MITM attack? (Score:3, Insightful)

    by Bos128 ( 3494835 ) on Friday January 31, 2020 @04:02AM (#59673916)
    The way these companies insert themselves between restaurants and customers sounds like a real world man in the middle attack.
  • It's basically every Internet startup these days: Fuck the people over to get rich
  • Not only are they presenting themselves as the restaurants, any complains and consequences resulting from mishandling of the food by the middlemen will impact the restaurants' reputation, and might even lead to legal actions against the restaurants (e.g. in case of food poisoning caused by food contamination in transport).

    Imagine someone has a severe allergy. The restaurant is notified of this and prepares the food according to best practices, separate station, fresh, sterilized utensils, care taken to avoi

    • Even worse, there are times when these companies are delivering food from restaurants that don't actually do delivery. (See uvajed_ekil's comment above and this article from this week [slashdot.org].) Basically, Grubhub makes a listing for a restaurant and has some pop-up kitchen whip up food from the menu (sometimes adding items to the menu that the restaurant doesn't serve). The quality, of course, isn't up to par with the real restaurant so complaints are made. Not to the copycat pop-up restaurant, though, but to the r

  • Am I missing something, or is this not a staggeringly massive risk for these services to be taking? My understanding is that food delivery services which partner with restaurants have indemnification clauses in their contracts to deal with liability for the myriad associated risks such as foodborne illness and automotive accidents (on top of requiring insurance for such things). If I order something on Grubhub from a non-partnered restaurant and then get sick, or the driver gets into an accident or so on, h

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