With the onset of 2026 comes the implementation of a new law passed by wide margins in both houses of the California State Legislature last September. The rule change requires third-party delivery platforms to implement enhanced fee transparency measures, as well as protections for 3PD customers and couriers.
Signed by Gov. Gavin Newsom and filed with the California Secretary of State in October, the new law, Assembly Bill 578, states that food delivery platforms must provide full refunds to customers who receive wrong orders or do not receive their orders at all, unless the customer is deemed responsible for the nondelivery or evidence indicates the refund request is fraudulent. The bill requires 3PD platforms to return tips to customers but not deduct the gratuity from delivery drivers.
Assembly Member Rebecca Bauer-Kahan authored the bill and described her motivation for the legislation as stemming from a personal experience in which she received only pizza for her daughter’s bat mitzvah despite ordering and paying for a dozen, according to reporting from Sacramento-based local media outlet ABC10.
“These changes ensure customers know where their money is going and that workers receive the full tips they earn,” Bauer-Kahan wrote of AB578 in a Jan. 3 social media post. “Proud to author legislation that strengthens consumer protections while supporting the drivers and couriers who keep our communities moving.”
Regarding partially completed orders, the bill states that food delivery platforms must provide refunds for unfulfilled aspects of the order, with similar adjustments for taxes, fees or gratuities directly tied to the undelivered items. In such cases, the law also requires platforms to provide mechanisms that allow customers to adjust the gratuity included in the order before delivery.
On the customer service front, the new law requires food delivery platforms to allow customers to contact “a natural person.” The platforms are still authorized to use automated customer service systems. However, when those systems are ineffective in addressing customer concerns, human agents must be promptly available.
Regarding courier protections, AB578 prohibits food delivery platforms from using any designated tips or gratuity to offset base pay. Additionally, the bill mandates that platforms disclose to couriers accurate, clearly identified, and itemized breakdowns of payments received for a delivery, including base pay, gratuity or tips, and promotional bonuses.
