It’s a timelessly familiar exchange. A neighbor comes over, conversation is had, good food is shared. But unlike the hosts of a traditional dinner party, Hrvatin and Kalar are getting paid for the fresh, home-cooked meals they prepare for their neighbors several nights a week, with the help of an increasingly popular website called Josephine.
[jump] “It’s so simple,” said Kalar. “We keep saying the goal is to bring things back… This is where you are connecting with people in your neighborhood who cook. It’s extending hospitality to strangers.”
But Josephine chefs such as Hrvatin and Kalar face a challenge. Because they aren’t operating a restaurant but also aren’t simply serving “dinner at the neighbors,” the work these home cooks are doing falls into somewhat of a legal gray area. This puts both Josephine and the cooks who use its online platform at risk of being shut down, despite the company’s own inspections and onboarding processes, which CEO and co-founder Charley Wang said are modeled after county-level inspections and have been “modified to include education and inspection for safety and hygiene practices specific to homes rather than commercial facilities.”
Founded in October 2014, the Oakland-based food startup allows Bay Area home cooks to get paid for preparing meals straight from their own kitchen. Online, customers can look up what meals are being offered in their area, pay and RSVP directly via the Josephine website, then arrive at the chef’s house later that evening to pick up their food. The company has received praise for the way it fosters community, supports small business and culinary talent, and opens up the economy to groups such as immigrants, stay-at-home parents, underrepresented minority groups, and disabled workers, for whom Josephine staff members stress cooking can be a viable source of economic empowerment.
Similar to other “sharing economy” workers, Josephine cooks are technically considered contractors. “They decide when to cook, how to cook, how to price. They get all the money and pay us a percentage for our services,” Wang said. He explained that contracted cooks at Josephine get 90 percent of their sales, unless they are a non-profit, in which case they receive 100 percent. The 10 percent cut covers liability insurance, food containers, a refund for their California food handler’s card, and other operational costs.
However unlike many other tech startups, which have gained a reputation for averting the law, Wang said his company is taking a different approach to its legal challenges. In order to protect its workers and avoid legal repercussions down the line, Wang and fellow Josephine co-founder Tal Safran are exploring ways to expand existing homemade food legislation.
In order to open up the conversation, Josephine is hosting a series of town hall meetings to share ideas about what this legislation should look like. Their kick-off event took place last Wednesday, when Josephine invited its employees, cooks, legal experts, and other food industry workers to discuss the legislation, which is still in its early planning stage. At the meeting, Policy Director at the Sustainable Law Economies Center Christina Oatfield shed light on the work that’s already been done to legitimize home food sales, like the California Homemade Food Act, which went into effect January 2013.
According to Oatfield, the California Homemade Food Act (AB 1616) enables cottage food operations (CFO), or a private home food enterprises, to sell “low-risk food products that do not require refrigeration” — home-made jams or dry goods, for example — to customers. Though a step in the right direction, Oatfield and Wang argued that the current law has several limitations. For starters, it doesn’t permit sales of fresh or fermented foods like the meals Hrvatin and Kalar have been preparing for guests. It also caps revenue for CFO operators at $50,000 in annual gross sales. And if cooks want a Class B permit, which is required to sell to third-party retailers, they have to fork up more cash.
Still, for many aspiring chefs, a home food business is a far more accessible option starting a restaurant or renting space in a commercial kitchen. “I have student loans; I don’t have the capital for something like that. Just to have a professional kitchen is a huge cost. This could change the entire industry,” Hrvatin said.
“This is $250,000 important,” said Kalar. “That’s how much you need to start a business. To build the separate kitchen, to get the insurance, licensing, marketing. This is huge.”
The legislation expansion has received support from cooks, consumers, and food industry workers. To date, a Josephine-sponsored petition to expand the Homemade Food Act has gathered 1,441 signatures — just 49 shy of it’s goal. And in February, California State Assemblymember Cheryl Brown introduced AB 2593, which, according to the Sustainable Economies Law Center, aims to “legalize the sales of homemade food, including hot meals, within certain limits.”
Josephine COO Matt Jorgensen suggested last Wednesday that the previous bill served to get the ball rolling, and that these town halls would provide input to help develop the bill further. “The revised bill language… was honestly written (based off the 2012 Home Made Food Act) before we’d gotten a lot of the specific feedback from regulators,” Jorgensen wrote in an email.
Josephine cook Reneé McGhee, who had to leave her previous job after an accident put both of her hands in casts, said the business has enabled her to work again, and having the protection of the law is important to her as a home cook. “This is extremely important because, along with what we are doing, we also need a certain amount of credibility,” she said.
Nevertheless, some town hall attendees questioned whether a legislative remedy was even necessary. They pointed out how many home food operations exist outside of Josephine’s roster, and it’s not uncommon for those who don’t meet the CFO standards to simply operate as an underground business. Kalar openly acknowledges this: “I grew up with a grandma and great aunt who had a business in their basement,” she said. “This is a very normal thing.”
Calling out other sharing economy startups like Uber and AirBnB, Oatfield said she and many others are concerned about what happens when emerging tech companies like Josephine become more popular and begin being used on a large scale.
“Charley is thinking about longevity, when this is more than a few dozen cooks, when it’s the whole Bay Area or the entire country,” said Kalar. “I’m sure down the road it’s going to get big, and it could hit some bumps, so we need to get ready and prepare for those bumps.”
In a recent blog post, Jorgensen wrote, “For most tech companies, evading the regulatory system is the default for as long as possible. Independent self-regulation makes this approach morally and practically tenable — i.e. grow grow grow. … At Josephine, we’ve explicitly decided to engage in the political process — which is typically a last resort for companies of our scale,” he continued.
The potential legal solution through expanding the Homemade Food Act, which Wang and Jorgensen said could take over a year to see through, was posed as a win-win. The legislation would support cooks by legitimizing more homemade food businesses, while also allowing for-profit enterprises like Josephine to grow without the looming threat of legal backlash.
As the policy talks and future town hall meetings move forward, Oakland native and urban farmer Brandi Mack urged those at the meeting to proceed with care and caution. “We must think about the reality that most policies put in place are to keep certain folks in power and others disempowered,” she said. “We should be looking at creating some policy around that and so we are still supporting the margin of who can cook and who can’t.”
Wang said the next town hall meeting will likely take place in June, though the exact date has yet to be determined.