Reheated Debate: The Launch of a Food-Sharing App Opens the Door for Lawsuits

Weeks after creating a veritable explosion in the blogosphere, Seattle-based food-sharing start-up LeftoverSwap launched in earnest, releasing a free iPhone app that allows enterprising users to sell their leftover dinner to their neighbors. The first documented swap happened last week, when a man in New York shilled a half-eaten bag of Popchips to a hungry buyer. Coincidentally, another bag of Popchips made the rounds in San Francisco the following day.

Though the ostensible purpose of the app is to mitigate food waste, it's raised eyebrows among food safety officials, many of whom worry that ordinary users will handle their leftovers in decidedly unhygienic ways.

For now, founder Dan Newman and his unnamed collaborators are still tweaking the format and trying to gird themselves against lawsuits or citations. They've already struck down one of the service's key components, which was to allow users to negotiate a price for their dinner spoils. “We've taken money out of the equation,” Newman says via e-mail. “It's primarily for giving food away.”

From a legal perspective, that's a smart move. Richard Lee, who directs the food safety program and San Francisco Department of Public Health, says it will be difficult to intervene if LeftoverSwap no longer qualifies as a “retail service.” Without a paper trail to follow, health department officials will be hard-pressed to track any individual transactions. If users create a black market for leftovers, they might do it with impunity.

But that still leaves open the potential for lawsuits, which could stymie business. Concerns over food-borne illness already hampered popular inner-Richmond restaurant Burma Superstar, which closed for a weekend after it was linked to an E. coli outbreak. Since LeftoverSwap doesn't offer any protocol for preparing and handling food, the ramifications could be far worse.

Newman says, again, that the company took steps to erase culpability. Namely, it enlisted the help of an Oregon-based broker to draft a comprehensive insurance policy. He's fairly certain that it will protect the company against lawsuits, and that if complaints crop up in other jurisdictions — San Francisco, for instance — he'll have a good argument to bring them back to Seattle.

Granted, a well-stacked insurance bundle is still a leap of faith for a sharing-economy business that's still untested. Yet it's a risk Newman is willing to take. For now LeftoverSwap has about $300 in its coffers, but he's considering other sources of revenue, such as web ads, or venture capital, or even a per-transaction fee — which would indeed bring the company into squishy “retail service” territory.

He just hopes you wash your hands before you handle that next bag of Popchips.

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