TORONTO – The Canadian Competition Bureau has launched a lawsuit against DoorDash Inc. and its Canadian subsidiary, accusing the company of misleading consumers regarding its online delivery pricing. The legal action arises from claims that customers are unable to purchase food and other items at the prices that are advertised on DoorDash’s websites and mobile applications, due to additional mandatory fees that are added during the checkout process.
The investigation carried out by the Competition Bureau revealed that the extra charges, which can include service fees, delivery fees, and surcharges for longer deliveries or smaller orders, have been misrepresented. These additional fees were reportedly framed in a manner that suggested they were taxes, leading to consumers paying higher prices than those initially advertised. This practice has been identified as drip pricing, a deceptive marketing strategy that has come under scrutiny.
The Competition Bureau alleges that DoorDash engaged in this practice for nearly ten years, accumulating close to $1 billion in revenue from the mandatory fees imposed on customers. As a result, the Bureau is seeking several measures against DoorDash, including an order to cease the misleading practices, to stop representing the fees as taxes, the imposition of financial penalties, and restitution for affected consumers.
In response, DoorDash has refuted these allegations, labeling the Bureau's requests as "misguided." The company asserts that it does not conceal fees from its customers or mislead them in any way. According to DoorDash, the additional charges are clearly presented in the transaction process, and they believe that the claims made by the Competition Bureau do not align with their business practices.
The lawsuit marks a significant development in the ongoing discussion about transparency in pricing structures within the online delivery sector. As the Canadian marketplace continues to evolve, businesses like DoorDash face increasing scrutiny regarding their pricing practices and their impact on consumer behavior. The outcome of this legal challenge could potentially set a precedent for how online delivery services communicate their pricing and fees to customers moving forward.
This report sheds light on the growing concerns surrounding consumer rights and the obligations of service providers to ensure clear and honest pricing. With millions relying on such services, the implications of this lawsuit may resonate beyond Canada, influencing international practices in the competitive landscape of online delivery services.
