DoorDash image courtesy of Pymnts.com

A lawsuit filed by Ross Hecox and his two young children accuses the popular food delivery service DoorDash of requiring iPhone users to pay more than their Android users for identical orders.

Filed in the U.S. District Court of Maryland, the lawsuit is seeking class-action status alleging that DoorDash is employing “deceptive, misleading, and fraudulent practices” to make up for the revenue the company loses due to the discounts it offers its customers.

DoorDash Expanded Range Fee in Question

According to the lawsuit, DoorDash delivery services encompass an added “expanded range” fee applied to orders beyond the client’s “normal delivery area.”

The plaintiffs argue that DoorDash imposes the expanded range fee in numerous conditions where it is unwarranted.

Some of the dubious ways the food delivery service exploits customers involve directing orders to restaurant establishments at a longer distance from the consumer to “validate” the application of the expanded range fee.

Additionally, the fee is levied on DashPass Program subscribers as a means to compensate for the income shortfall resulting from the membership plan.

DashPass refers to the company’s $10 monthly membership fee that allows for orders above $12 to be delivered without the normal fees.

A DoorDash Delivery in Progress | Photo credit TechCrunch

The case filing included two screenshots that reveal the extended range fee is mainly slapped on accounts with active DashPass, leaving out those without despite having identical orders to the same address.

“DoorDash uses this deceptive practice to trick consumers into believing Dashers receive the ‘delivery-related’ fees when, in reality, each and every ‘delivery fee’ is retained in total by DoorDash,” the lawsuit alleges.

Are iPhone Users Paying More for DoorDash’s Delivery Services?

The $1 billion class action case seeking compensation “for all consumers who fell prey to DoorDash’s illegal pricing scheme over the past four years,” claims that iPhone users are paying higher base delivery fees compared to their Android counterparts.

The lawsuit added that DoorDash’s decision to charge iPhone users higher than customers on Android is based on other factors “unrelated to delivery and service costs.”

It is possible iPhone users are forced to pay more for base delivery fees because some studies have shown that they tend to earn more compared to Android users.

The complainants with their legal representatives cited various surveys including Netguru’s ‘iPhone vs Android Users’ which claims under demographics that iPhone users generally earn more than Android users.

Another report by Cision PR Newswire claimed that iPhone users spend at least $100 monthly on tech purchases, almost double what users on Android spend.

“[A]s tests indicate, DoorDash charges the expanded range fee on iPhone users more often than Android users and charges iPhone users more for ‘delivering’ (likely because studies reveal iPhone users earn more),’” the lawsuit outlined. “These tactics are simply money grabs.”

The problem with a lawsuit like this is that it is incredibly hard to prove that DoorDash’s many vague fees are actually just excuses to charge iPhone users more. It’s important to note that there is little direct evidence to show that DoorDash is unfairly up-charging Apple customers.

Other Ways DoorDash Could Be Exploiting Customers

The lawsuit, leaving nothing to chance, mentioned several other ways DoorDash is illegally earning from unsuspecting customers such as using “city” fees to trick users of its delivery services into believing the money collected is directed to the local government.

The lawsuit also alleges that DoorDash’s optional $3 “Express” fee, which supposedly speeds up delivery, does not actually have the capacity to accelerate orders.

This suggests that paying DoorDash for faster delivery might not speed up the delivery of your order. Customers may be better off investing that $3 in some additional sauce packets.

According to a related report by Insider, a DoorDash spokesperson has refuted all the claims made in the lawsuit referring to them as “baseless and simply without merit.”

The spokesperson added that the company is vigorously going to fight the claims in the lawsuit as they continue working to enhance their platform to better serve customers.

“We ensure fees are disclosed throughout the customer experience, including on each restaurant storepage and before checkout. Building this trust is essential, and it’s why the majority of delivery orders on our platform are placed by return customers,” the DoorDash spokesperson told Insider.

This is not the first time DoorDash has been sued for exploiting customers on its delivery platform. In the heat of the COVID pandemic, the company was taken to court along with the likes of Uber Eats, Postmates, and GrubHub for their alleged exploitative practices, like imposing additional unnecessary fees, as Reuters reported in 2020.

According to Engadget, the city of Chicago sued DoorDash and GrubHub claiming they promoted delivery services from eateries that never authorized inclusion on their platforms.

Similarly, the District of Columbia’s attorney general initiated a separate legal action against DoorDash, alleging that the company utilized tips to subsidize a portion of drivers’ base wages rather than supplementing their expected earnings. DoorDash agreed to a $2.5 million settlement to resolve the dispute with Washington, DC.

The DoorDash, Inc. stock with the ticker DASH tumbled following the latest lawsuit, closing May 22 at $65.63, down 2.02% according to Yahoo Finance.

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