Are gig-economy promotions for Black-owned restaurants legal?

Here’s a thorny situation to pick apart. In the wake of all the unrest following the death of George Floyd, both Uber Eats and Postmates have come up with a promotional offer ostensibly being pushed out to promote unity and ease racial divisiveness. They’re offering to waive their delivery fees for any meals from restaurants with Black owners. For anyone who follows the news regularly, that proposal is probably setting off a couple of alarms. With all of the fair treatment laws in place and a general legal insistence on everyone and everything supposedly being “color blind,” is that something they can do, even if it sounds like a generous and helpful gesture?

The Free Beacon dug deeply into that question this week and found that the answer is… complicated. Like, extremely complicated, revolving around a number of factors including what state you’re placing the order in and whether or not you’re talking about federal, state or municipal laws.

New meal-delivery company promotions benefiting black-owned restaurants are raising legal questions about whether gig economy giants can offer race-based benefits.

The programs, announced by Uber Eats and Postmates following the death of George Floyd at the hands of police, waive delivery fees for black-owned restaurants but make no such benefit available to other minority or white-owned businesses.

The legal questions are compounded by a lack of transparency surrounding the programs and seemingly random participant criteria. Postmates has already made missteps. At least two businesses owned by white or Arab proprietors were on curated lists and searches of black-owned restaurants on the Postmates Washington-area platform as recently as Tuesday. Both restaurants told the Washington Free Beacon that they were added without consultation and were removed following the Free Beacon‘s inquiries.

So both companies clearly rushed these policies out without taking much time to do their research or prepare. One of the glaring mistakes that the Free Beacon found was that many of the restaurants on the list of Black-owned businesses were not in fact owned by Black proprietors. They also have virtually no answer to the question of which owners “qualify” as being Black. (Did they think to bring on Joe Biden as a consultant?) What if the owner is the child of biracial parents? What if they are of Indian heritage with very dark skin? Would being Jamaican count? If Rachel Dolezal opens up a restaurant, could she participate?

Also, even if you’re willing to easily accept that they wouldn’t offer such a promotion to white-owned eateries, what about if the owner is Hispanic? How about if they’re Asian or indigenous American? This seems like a sticky swamp to wade into, doesn’t it?

None of that dives into the deeper and more serious legal questions examined in the linked article. As far as this promotional offering being problematic under the law, it’s a murky subject. There would seem to be few problems at the federal level. But each state and many cities have their own social alignment laws on the books where you can quickly get in trouble the moment you start adding qualifiers to any business arrangement based on race, gender, sexuality or any similar demographic options.

But as the report notes, none of these things may wind up mattering because the promotional deal doesn’t cut anyone out of the opportunity to have their food delivered. The customer can still order from any restaurant on the list. And they aren’t even arranging to have one eatery make more than another. The only difference in the money changing hands is that Postmates and Uber Eats are voluntarily taking a loss on each qualifying order by waiving the delivery fee. The cost of the food and the profit to the restaurant remains the same no matter what color the owner’s skin is.

And then there’s the less technical but more “common sense” aspect to the question. It would be shocking indeed for the government to complain about this arrangement when they routinely create set-aside programs in the awarding of contracts and hiring criteria for government jobs based on race all the time. Just because someone is making it easier and more likely for Black-owned business to attract more takeout orders, are they really going to complain?

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