DoorDash, the San Francisco-based monopoly delivery service that’s been profiting off of restaurant delivery hell for years, is now being sued by Canada’s competition watchdog. The Competition Bureau has accused the company of misleading customers with its pricing structure since its entry into the Canadian market in November 2015. In fact, allegations have surfaced that DoorDash inflates its prices for online consumers’ delivery, advertising a lower price than they pay. That’s the glaring issue here that casts doubt on the integrity of their entire pricing model.
The lawsuit claims that DoorDash imposes numerous add-on fees that can more than double the actual cost of an order. These predominant charges consist of service fee and delivery fee, both of which fluctuate according to their proximity and total order. If your couriering order is beyond the restaurant’s normal delivery area, you’ll incur an additional, predetermined flat fee. That fee is $1.99 depending on the location. British Columbia (B.C.) customers are charged a 99-cent mandatory single-use fee for every order. This fee is what DoorDash uses to pretend that they’re paying their gig workers more than the local minimum wage.
While the lawsuit addresses the issue broadly, it includes a poignant anecdote about one B.C. This restaurant charges $26 for souvlaki on DoorDash. At first blush, the cost seems straightforward. It’s not just the picayune mandatory charge consumers have to pay, like the 99-cent fee and a $2.99 delivery charge. According to the Competition Bureau, DoorDash’s business model distorts the full price of services. Consequently, consumers are not presented with the full picture when ordering.
In response to the lawsuit, DoorDash spokesperson Trent Hodson went on the offensive. He said that his company is upfront about its fees and does not deceive consumers. He characterized the legal action as a “misguided and excessive attempt to target one of Canada’s leading local commerce platforms,” asserting that it unfairly singles out DoorDash.
“It does not hide fees from consumers or mislead them in any way.” – Trent Hodson, DoorDash spokesperson
“This application is a misguided and excessive attempt to target one of Canada’s leading local commerce platforms.” – Trent Hodson, DoorDash spokesperson
“It unfairly singles out DoorDash, and we intend to vigorously defend ourselves against these claims.” – Trent Hodson, DoorDash spokesperson
The Competition Bureau too has raised alarm about consumer expectation of clear, transparent pricing. According to their statement, when individuals order online, they anticipate not only receiving their food but being presented with honest pricing. They laid out that consumers—unclearly imposed expect to pay the price they see advertised, not the price they come to pay.
“When consumers go online to order, they expect these services to deliver not just food, but also honest pricing.” – The Competition Bureau
“Consumers expect that the price they see advertised will match what they ultimately pay.” – The Competition Bureau
As the legal war continues, it’s unclear what this latest lawsuit will mean for DoorDash’s business north of the Canadian border. The corporation has gone on to become the largest player in the extremely consolidated food delivery industry. Now, this lawsuit has the potential to put its business practices to the test.
