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A class-action lawsuit claims that DoorDash used hard-to-pin-down delivery fees to systematically charge iPhone users for the delivery service more than others.
The lawsuit (PDF), filed May 5 in the District of Maryland, is getting heated. Plaintiff Ross Hecox, in addition to his two children and a presumptive class of similarly situated customers, briefly described DoorDash as an online marketplace with 32 million users and billions dollars in annual income.
“However, DoorDash generates its revenues not only through heavy-handed tactics which takes advantage of struggling merchants and a significant immigrant driver workforce, but also through deceptive, misleading, and deceptive practices that illegally deprive consumers millions, if not billions, of dollars each year,” the suit added. “This lawsuit details DoorDash’s illegal pricing scheme and seeks to hold DoorDash accountable for its numerous consumer frauds, including one of the most vulnerable sections of society, minor children.”
Specifically, the suit claims that DoorDash misled and defrauded customers by
- The creation of his “Delivery Fee” seems to be related to distance or need, although it does not go to the person who delivers.
- Offered an “Express” option which means faster delivery, but changed the wording to “Priority” on the billing so it doesn’t hold back on delivery times.
- Charging an “Expanded Range Delivery” fee that appears to be based on distance but is actually based on a restaurant’s subscription level and needs.
- Add an undisclosed 99 cent “marketing fee,” paid by the customer instead of the restaurant, to promote menu items that customers add to their carts.
- Keep the minimum order amount included with “zero-fee” DashPass memberships and coupon offers.
- It’s common to manipulate DashPass subscriptions to look like huge savings, when the company “engineers” fees to seem like a reduction.
One of the most interesting and infuriating claims is that DoorDash’s fees, based in part on “other factors,” continue to charge iPhone users of its app more than Android users who put in the same orders. The plaintiffs and their law firm conducted several tests of the DoorDash system, using different accounts to order the same food, from the same restaurant, at almost the same exact time, delivered to the same address. , with the same account type, delivery speed, and tip.
Panera, Chipotle, and Chick-fil-A research
In one test, an iPhone user placing an order at Panera was charged an Expanded Range Fee of 99 cents, while an Android user—which, although it technically wasn’t required—was charged 15 miles. the distance from the delivery address is zero. In another test, the same Chick-Fil-A orders at an address resulted in the iPhone user—this time, one 15 miles away—paying $1 more in Delivery Fees. A third attempt at a Chipotle order, this time with two users at the same location, saw the iPhone user charged by the other two for a Delivery Fee and an Expanded Range Fee, an 8 percent increase in Android.
The plaintiffs made four more attempts, in which the iPhone user was:
- Charged $5 more despite being closer to a different Panera than the Android user
- Shown a “discounted” Delivery Fee despite paying $2 more on Android
- Charged them more for the same order than while logged in on Android device
- Receive a smaller discount on their DashPass account than other Android users with DashPass
“As shown in the tests above … DoorDash consistently charges iPhone users more than Android users for reasons unrelated to delivery and service costs,” the complaint states. . “DoorDash is likely charging iPhone users because studies suggest that iPhone users make more money than Android users,” it concluded, citing a blog post that circulated several extensive survey and statistics about iPhone vs. Android users.
Various surveys suggest that iPhones tend to attract buyers with higher incomes (SlickDeals, 2018), have a higher share of usage among 18-34-year-olds (Mercator Advisory Group, 2019), and double the cost of apps than Android users. (Statistics, 2022).
The plaintiffs are seeking $1 billion in damages for those “victimized by DoorDash’s illegal pricing” over the past four years. The case also includes allegations that DoorDash improperly allowed children to enter into contracts with the company without proper vetting.
DoorDash, which raised $3.2 billion during its 2020 initial public offering, issued a statement to several media outlets in response to the lawsuit.
“The claims set forth in the amended complaint are baseless and simply without merit,” a DoorDash spokesperson said. “We make sure that the charges are disclosed throughout the customer experience, including at each restaurant store and before checkout. Building this trust is important, and this is why the majority of delivery orders in our platform is placed on returning customers. We will continue to strive to make our platform work better for customers, and will vigorously fight these allegations.
