Illinois targets third-party restaurant reservation resellers with new bill
The Brief
Illinois lawmakers are working to ban the resale of restaurant reservations without restaurant approval.
Rep. Margaret Croke discovered some Chicago spots were being scalped online for hundreds of dollars.
The bill passed the House unanimously and could become law by summer.
CHICAGO - Have you ever waited online for a restaurant reservation to open only to discover they were already taken? Legislators say there is a black market for restaurant reservations, and now they want to pass legislation to stop it.
What we know
It's one of the hardest reservations in Chicago to get, and it had one state lawmaker asking why.
"Why can I never get a table? I would log on at 9 a.m. when they would release new seats, and I could just never get a reservation," said Rep. Margaret Croke (IL-12th District).
It's a common complaint in Chicago, which is home to some of the most in-demand restaurants in the country.
Croke did a little research into trying to figure out why she couldn't get a reservation. To her surprise, she discovered third-party companies were snatching them up and then reselling them on an online market.
"When I wanted to go to Armitage Ale House, I could have bought a reservation for like $400 for Friday night or RL in Mag Mile for $700. And I thought that was insane because some of these restaurants are places that you would like to be kind of neighborhood places that could just stop by at," she said.
Croke partnered with the Illinois Restaurant Association, or the IRA, to introduce new legislation. It's called "The Restaurant Reservation Anti-Piracy Act." It would ban third-party reservation service companies from listing, advertising, promoting, or selling reservations, unless there's a written agreement between the third party and the restaurant.
Dig deeper
Croke and the IRA believe these third-party companies are not only robbing consumers, but also having a negative impact on the restaurants.
"Customers shouldn't have to compete with bots or, you know, predatory third-party resellers. That's how a lot of restaurant owners feel, right? Why should they compete with bots or predatory third-party resellers? So that's very important. But also, these unauthorized third-party resellers increase the numbers of no-shows. That's the biggest problem," said Sam Toia, president of the Illinois Restaurant Association.
Jonas Frey is the founder of Appointment Trader, which is one of the third-party companies lawmakers are trying to ban. It allows individuals to exchange or sell reservations for restaurants.
FOX 32 went to Appointment Trader's website, and here's what we found: a reservation for four people this Saturday at Bavette's would cost you $265, and at Italian restaurant Tre Dita on Saturday – $135.
Now remember, you are buying the reservation only. No food or drink is included.
"That argument that because of Appoint Trader you can't get a reservation is absolutely bogus," Frey said.
His counter? This is a free market and restaurants don't own the reservations – the consumers do, especially when it comes to pre-paid reservations where customers can lose money if they have to cancel.
"The reason why you can't get a restaurant reservation at any one of these restaurants is because there are more people that want to go than there are seats, and Appointment Trader grew because there were a lot of people that weren't able to get reservations," Frey said.
Frey says this is a consumer-driven platform, and they have piracy measures and metrics to combat against bots and scalpers.
What's next
Appointment Trader and other third-party websites were just banned in New York, and Chicago may not be far behind.
Those backing this third-party reservation ban say if it passes, restaurants and consumers would be the winners.
"I think that if we weren't intervening right now, that this problem would just become worse and worse and proliferate throughout Chicago," Croke said.
The proposed bill passed the Illinois House unanimously, and proponents say they are optimistic there will be no opposition in the Senate or from Governor JB Pritzker. They hope to have it signed soon, and it could become law by this summer.
The Source
FOX 32 Chicago Investigates reported on this story.
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