Commentary

Delivery driver crime: The restaurant industry problem nobody talks about

With restaurant online ordering expected to reach $365 billion by 2030, it's little wonder delivery driver is one of the hottest jobs around. But there's a problem that nobody talks about: crime on delivery drivers and the liability faced by brands and third-party providers when it happens. And it happens a lot.

September 7, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

In restaurant company corporate boardrooms and food service events worldwide, delivery is a very big topic. And with good cause.

As a recent UBS report detailed in Barron's this July, globally online food ordering is expected to soar 20 percent annually until 2030, reaching $365 billion. In short, delivery makes up a lot of restaurant business right now, and it's definitely not just the pizza purveyor's game anymore. In fact, McDonald's said during a quarterly earnings call earlier this year that delivery accounts for as much as 10 percent of sales in the locations offering it.

But all the buzz and interest notwithstanding, none of those discussions ever seem to touch on one very obvious element of delivery: crime.

Crime is omnipresent in the life of the growing number of delivery people and providers doing business, and it is often violent, including in these recent examples:

In Atlanta last June, three teens pistol-whipped a pregnant delivery driver in an attempt to rob her during a delivery, according to the Atlanta Journal-Constitution.
A month later, the Baltimore Sun reported that 15 teens jumped a delivery driver on his way into a University of Maryland dorm and robbed him at knifepoint.
And just last month in Indianapolis, three men robbed a 24-year-old manager filling in on a food delivery run, then shot him to death and left his body in a vacant home, according to the Indianapolis Star.

Delivering restaurant food — whether via in-house drivers or third-party providers — can be an extremely risky business and sometimes even deadly.

“This a huge and dynamic issue for delivery people and for those who retain them. …Class action lawyers and personal injury trial lawyers are tuned into this issue, as are the courts. Businesses would be wise to consider it as well.” -Jonathan Mazer

One problem is that most brands won't talk about the problem that clearly exists by reading the crime reports that fill local newspapers and newscasts. This reporter truly did try to find a brand that would answer some questions about the subject, but each politely refused, citing everything from the need to protect delivery personnel and unfamiliarity with the subject, to a rush of non-returned calls and emails or even the terse, "We cannot comment."

And really, who can blame a brand from not wanting to be the name identified in a story about food delivery personnel being robbed, beaten and in the most extreme cases, killed? If nothing else it dissuades potential delivery personnel from applying for such jobs. And when brands like Domino's are paying $20 an hour when the federal minimum wage is $7.25, it's clear that the need is great.

But the bottom line in all this is that delivery is absolutely going to happen one way or another for restaurants of all different service models and categories simply because today's consumers demand it. And while I couldn't get feedback from any brands that deliver, two attorneys I spoke with had plenty to say on the matter, including:

James Hanratty, an attorney who has represented restaurant chains and independents for 29 years on business liability issues through his work as managing attorney at the regional defense litigation firm Marshall Dennehey Warner Coleman & Goggin in Jacksonville.

Jonathan Mazer, a New York City law firm partner, who has handled disputes around independent contractor status issues through his employment law and litigation practice at Schlam, Stone & Dolan LLP.

We're sharing some of those responses here today to help restaurant leaders get a better grasp on the scope of this area of liability and even pointers on what brands can do to protect employees and themselves with both third-party delivery providers and those employed in-house.

Q: How big an issue do you see delivery driver liability issues as being for restaurant companies and independents?

Mazer: This a huge and dynamic issue for delivery people and for those who retain them. The financial obligations and other aspects of the relationship differ significantly for employees and independent contractors. Class action lawyers and personal injury trial lawyers are tuned into this issue, as are the courts. Businesses would be wise to consider it as well.

Hanratty: This is a big issue that continues to grow as quickly as the number of delivery services increases in number and in the types of services they provide.

Q: For brands that use third-party delivery providers, are there any liability issues or procedural things they should have in place to protect themselves and their brands in the event a driver causes or is the victim of a crime/accident?
Hanratty: Like with any third-party vendor or service provider, the business that hires delivery services needs to be careful about the scope of the agreement. It should be in writing, and at a minimum address issues such as insurance and limitation of liabilities. The agreement should specifically address what the services are and what they are not.
For example:

The agreement should include a requirement that the delivery service provide proof of insurance, and update it regularly.
The insurance should cover the delivery service and the drivers whom it hires or contracts.
The proof of insurance should list the restaurant as an additional insured on the policy.
The agreement between the delivery provider and the business hiring them should confirm that the business is not the employer of any driver and that the drivers are not operating their vehicles on behalf of the business but are acting on behalf of the delivery service.
The agreement should include a prohibition of subcontracting the delivery services to other providers that may not pass the same scrutiny as the contracting service.
The agreement should include indemnity clauses that shift all liability for driver's conduct on the service, not the business that contracts the service.

The business should let its customers know about the delivery relationship. All menus, especially online menus should contain language informing the customer that the business uses a third-party delivery service and that the driver is not the agent or employee of the business. The business should also inform its customers that the delivery option is limited to the service contracted by the business and that third-party delivery drivers that are not contracted by the business are not authorized to perform delivery services. This will protect against an "apparent agency" argument.

Many delivery services have a contract of their own but businesses should be careful about accepting what the delivery service has written and should consider having each such agreement reviewed and amended if necessary by the business' own attorney.

Mazer:Companies using third-party providers for delivery should have clear agreements in place settling the nature of the relationship and particularly the degree of control, if any, to be exercised by the business over the conduct of the delivery person or other contractor.

The business should also have procedures for dealing with accidents or claims, and make sure the drivers are aware of those procedures. Such procedures will often protect both the business and the driver.

Q: What about the liability brands face who actually employ their own delivery drivers, like Domino's? What processes and training safeguards should they have in place and what kind of liability risks do they face?
Hanratty: Employers who use employees as drivers face vicarious liability for the employee's actions, so it is as if the company itself was behind the wheel. The employer should create policies for conducting pre-employment screening of all employees who will drive on the job.

They need to check driving records and any criminal convictions. The employee must understand that he/she has a duty to report any citations whether they happened on the job or on private time. The employer must consult its insurance agent to confirm that the proper coverage is purchased as general liability policies can have exclusions for drivers.

Training and conduct policies should be prepared or adopted. The carrier or agent may have specific requirements for this training or policy content so this should be checked as well. An employer that is located near state lines needs to be cognizant of the fact that the driver may cross state lines and laws and regulations may be different. The employer needs to be aware and compliant with both states' rules.

“I am seeing plaintiff’s lawyers making more efforts to attack the training of drivers, adherence to hiring and firing guidelines, and periodic renewal of DMV or background checks of drivers. They are trying to establish a separate claim for negligent hiring, training or maintaining of employment." -Hanratty

Q: Are you personally in your job seeing a greater number of cases involving employer or brand liability with their delivery partners or employees? If so, can you give some details?

Hanratty:We are seeing a small increase in this type of inquiry. However, for the most part, the business is insured and the contact comes from them, so this tells me that the businesses are smart enough to include their carrier in the business planning and in developing policies.

Mazer: The status of drivers as independent contractors is something our law firm deals with on a regular basis, and we anticipate these matters will become even more frequent as the gig economy grows.

Q: What do you think brands are most often overlooking in protecting themselves and their delivery employees or third-party providers from liability issues related to crime, violence and accidents on the job?

Mazer:Many businesses that use independent contractors only discover this possible liability after a serious accident or another claim, when they should have included it in their planning from the start. If they haven't addressed the issue of liability for driver behavior, they should have an attorney review their driver agreements and procedures promptly. If there is no written agreement with affiliated drivers, they should correct that right away by creating such an agreement.

All companies providing delivery services should have an attorney draft agreements and procedures to govern the driver relationship, from the perspective of both the business and the driver. A lot of businesses working with independent contractors have not been systematic in documenting the nature of the relationship in a way that will protect them in the event of a claim.

Feature photo: iStock

Inset photos: Provided

About S.A. Whitehead

Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.