“I would feel very uncomfortable if I were tax counsel for one of those companies if those taxes weren’t being collected,” said Hayes Holderness, assistant professor at the University of Richmond School of Law and a state tax policy expert. It’s another example of how existing laws haven’t yet adapted to the gig economy - and in the meantime, these tech companies are taking advantage of the loopholes. Both the apps and the restaurants could later be on the hook for paying taxes that apps aren’t currently collecting.

The experts told Recode these tax practices could be a liability not just for the food delivery apps but also for the restaurants whose food they deliver. If you account for all of the US, that could amount to hundreds of millions of dollars per year. The sales taxes in question are on fees that can amount to as much as a third of the total price of food orders - or at least $120 million per year of taxable dollars on the sales of major food delivery companies in California and New York alone, based on Recode’s calculations on an estimated market size from research firm Forrester. Several tax experts Recode interviewed said food delivery app companies’ tax practices could raise legal concerns. This discrepancy puts those rivals in a precarious position if regulators take notice and object. But Recode has found that in some of those same states, Grubhub’s top rivals in the delivery space, including DoorDash, Postmates, and Uber Eats, don’t appear to be collecting a cent. The food delivery company Grubhub said it has collected hundreds of millions in taxes for delivery and service fees in dozens of states since at least 2011.

Is grubhub seamless