The lawsuit accuses DoorDash of charging iPhone users more for identical orders – Ars Technica

Zoom in / A class action lawsuit claims that DoorDash makes it appear to customers that the distance and effort involved in delivery is altering its fees, when the company’s algorithm — and phone selection — would have a greater impact.

Michael Nagel/Bloomberg via Getty

A class action lawsuit alleges that DoorDash uses hard-to-quantify delivery fees to systematically charge iPhone users of its delivery service more than others.

The suit (PDF), filed May 5 in the District of Maryland, has been heated. Plaintiff Ross Hickox, along with his two children and a presumed class of lookalike customers, succinctly defines DoorDash as an online marketplace with 32 million users and billions of dollars in annual revenue.

However, DoorDash generates its revenue not only through harsh tactics That does benefit from struggling merchants and a large workforce of migrant drivers, however Also through deceptive, misleading and fraudulent practices that unlawfully deny consumers it Millions, if not billions, of dollars annually,” the lawsuit adds. This lawsuit details DoorDash’s illegal pricing The scheme seeks to hold DoorDash responsible for the massive scams affecting consumers, including One of the most vulnerable segments of society, minor children.

Specifically, the lawsuit alleges that DoorDash misleads and defrauds customers through

  • Making the “delivery fee” appear to be related to the distance or the order, even though none of it is going to the person delivering.
  • Offer an “express” option that includes faster delivery, but then change the wording to “priority” on invoices so that it’s not hung up on delivery times.
  • Charging ‘Extended Range Delivery’ fees that seem to be based on distance but are really based on the restaurant’s level of involvement and demand.
  • Adding an undisclosed 99 cent “marketing fee”, paid by the customer rather than the restaurant, to promote menu items customers add to their carts.
  • Blackout minimum order amounts associated with DashPass membership and “No Fee” coupon offers.
  • In general, DashPass subscriptions are manipulated to look like great savings, when the company’s “engineering” fees seem low.

One of the most interesting and interesting claims is that DoorDash fees, based in part on “other factors,” consistently charge iPhone users its application more than Android users who make the same orders. The plaintiffs and their law firm ran some tests of the DoorDash system, using different accounts to order the same food, from the same restaurant, at about the same time, delivered to the same address, and with the same account type, delivery speed, and tip.

Search Panera, Chipotle, and Chick-fil-A

In one test, an iPhone user who placed an order from Panera was charged an extended range charge of 99 cents, while an Android user—who was, while it shouldn’t technically matter, within 15 miles of the delivery address—was not. like that. In another test, Chick-Fil-A’s identical orders to an address caused an iPhone user—this time, one 15 miles away—to pay an extra $1 in delivery fees. A third test on a Chipotle order, this time with both users in the same place, saw an iPhone user charge more for delivery fees and extended range fees, an 8 percent increase over Android.

Prosecutors ran four more tests, where the iPhone user:

  • Was charged an extra $5 despite being closer to a different Panera than an Android user
  • Showing “reduced” delivery charges despite paying $2 more than Android
  • Charged more for the same request than for logging in on an Android device
  • Received less discount on DashPass account than another Android user with DashPass

“As the above tests demonstrate… DoorDash routinely charges iPhone users more than Android users for reasons that have absolutely nothing to do with delivery and service costs,” the complaint alleges. “DoorDash is likely to charge iPhone users more because studies show iPhone users make more money than Android users,” she concluded, citing a blog that compiles a number of surveys and general statistics about iPhone versus Android users.

Various surveys indicate that iPhones tend to attract high-income buyers (SlickDeals, 2018), have a higher usage share among people between the ages of 18-34 (Mercator Advisory Group, 2019), and spend twice as much on apps than iPhone users. Android (Statista, 2022).

The plaintiffs are seeking $1 billion in damages for those who “fell prey to DoorDash’s illegal pricing” over the past four years. The suit also includes allegations that DoorDash improperly allows children to contract with the company without proper vetting.

DoorDash, which raised $3.2 billion during its 2020 initial public offering, provided a statement to several media outlets in response to the lawsuit.

A DoorDash spokesperson stated, “The allegations made in the amended complaint are baseless and simply unfounded.” “We ensure that charges are disclosed throughout the customer experience, including on each restaurant’s shop page and before checkout. Building that trust is essential, which is why the majority of delivery orders on our platform are placed by returning customers. We will continue to strive to make our platform work better for customers. , and will vigorously fight these allegations.”

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