Bill Caption

Relating to the regulation of restaurants and third-party food delivery services, including the issuance of certain alcoholic beverage certificates to restaurants. 

Fiscal Notes

No significant fiscal implication to the State is anticipated.

Bill Analysis

SB 911 would create a regulatory framework for third-party food delivery services (such as Uber Eats, Door Dash, and others) that deliver food and beverages from restaurants to customers. This is a negotiated bill with support from industry stakeholders on both the restaurant side and the delivery side.

The bill would allow restaurants which are also holders of a wine and malt beverage retailer's permit, a mixed beverage permit, a private club registration permit, or a retail dealer's on-premise license to also be issued a food and beverage certificate.

SB 911 would place certain restrictions on third-party food delivery services including:

• arranging the delivery of food or beverages from a restaurant unless the service has filed a certificate of formation or registration;
• using a restaurant's mark or trade name in connection with the service in a misleading way;
• adding a restaurant removed from the service to the service, unless they have written consent from the restaurant; or
• charging a restaurant a fee in connection with the service's delivery of food or beverages unless the restaurant has agreed to pay a fee under an agreement. 

Third party food delivery services would be required to provide a complaint process for consumers and to remove a restaurant from their service upon request by the restaurant.  

The bill would require agreement between a third-party food delivery service and a restaurant must be in writing and to include certain provisions. If a third-party food delivery service violates these rules, an aggrieved restaurant may bring action against the service for injunctive relief and damages equal to the restaurant's actual damages, or the service's profits arising from the violation.

SB 911 would prohibit a municipality or county from adopting any regulation that would impose requirements to third-party food delivery service that are more restrictive than this section, or which affects the fees charged to a restaurant by a third-party food delivery service, or affects the terms of an agreement between a third-party food delivery service or restaurant. 

Vote Recommendation Notes

The proper role of government in regulating the economy is to create a level playing field that allows business to thrive without giving a statutory advantage to a preferred business or type of business at the expense of a competitor or other segment of industry, and which allows consumers maximum choice. Regulations should be light where necessary and avoid onerous requirements that are unnecessarily difficult to comply with, or which favor large businesses over small businesses. 

SB 911 takes a light regulatory approach which expands consumer choice by allowing more types of businesses to have a food and beverage certificate, levels the playing field by ensuring that third-party food delivery services can continue to operate in this state but in such a way that does not infringe on the rights of restaurants, and ensures that transactions in a friendly environment are enabled. For these reasons, Texas Action supports SB 911.