Lawsuit accuses DoorDash of charging iPhone users more than others

https://arstechnica.com/gadgets/2023/05/lawsuit-accuses-doordash-of-charging-iphone-users-more-for-identical-orders/

by carride • 3 years ago

88 77 3 years ago

arstechnica.com

noahmbarr• 3 years ago

While deplorable, is price discrimination along non-protected customer segments (“classes”) illegal?

elashri• 3 years ago

[removed]

Edit: Seems like I misunderstood the parent usage of class to refer to the terms as a sociological term not as its US legal term. Sorry about that

pessimizer2• 3 years ago

This is something that's not really worth considering unless you want to pick a fight. You just look it up and see if it is true or not.

edit: Ah, "customer segments" vs. "classes"; I didn't understand the misunderstanding.

lolpython• 3 years ago

I think OP was just using the definition of "class" as in a larger group of people that could file a lawsuit.

See https://www.law.cornell.edu/wex/class_action

horsawlarway2• 3 years ago

He's using a specific legal term in the US.

See: https://en.wikipedia.org/wiki/Protected_group

A protected class is a group that is illegal to discriminate against in this manner, in the United States (and several other legal systems).

"Phone OS" is not a protected class. Many other things are, though, such as Race, Religion, Sex, etc... Varying a bit by jurisdiction and legal system.

pessimizer2• 3 years ago

I don't even think it's deplorable, if it's possible to charge iPhone users more, do it. They'll pay. It also doesn't matter if it's illegal; they're suing because the entire fee system may be fraudulent, and since they're hiding this alleged iPhone tax in arbitrarily named and applied fees, it's relevant.

Even worse imo, if it's held to be true, Doordash will be in real existence-threatening trouble with iPhone users and will have to increase its marketing spending towards them drastically.

pleb_nz3• 3 years ago

Will general door dash users even know of the suit. Not exactly plastered over the news, hackernews is the only place I've seen an air about it.

autoexec• 3 years ago

I don't even think it's deplorable,

That'd put you in the minority, but companies have been working hard for many years to get consumers used to the idea that they should be able to discriminate against specific groups of people and jack up their prices for individuals based on whatever they want. Retail, even grocery stores, have been experimenting with dynamic discriminatory pricing.

I'd love to see laws that require companies to post their prices clearly and publicly and prevents them from deviating from those prices no matter who places the order or brings an item to the register.

We may soon find ourselves in a future where you're required to identify yourself just to see a price because it'll be calculated as a percentage of your total income. Where your political views, your medical conditions, countless proxies for race/religion/sexual orientation, or even who your friends are, can cause you to pay more or even get you priced out of things you regularly buy today.

You might think that you can always "vote with your wallet" if you feel that you're being ripped off, but that doesn't help you when every restaurant and retailer is doing the exact same thing, and none of it is transparent to the user so you won't be allowed to know when you're getting screwed over or how badly no matter which arbitrary metric is being used as justification for squeezing every last possible penny out of you.

larrymcp• 3 years ago

My same question, yeah. If you think of buying a new car, for example, the salesman will size up the customer in all sorts of ways, taking many signals into account in order to negotiate the price as high as he think he can get the customer to agree to. Perfectly legal, and it happens all the time.

I don't know if this DoorDash suit named the specific area of law that they allege was violated, but I would need to understand the difference between what DoorDash is doing and my scenario of the car salesman, for example.

s3p2• 3 years ago

I think it's about misleading the consumer. This has less to do with a felony violation of the law and more about whether they are liable for the way they have marketed and misled consumers. The end result is a fine, not a criminal conviction, so I think the plaintiffs have a nonzero chance of winning.

burnished• 3 years ago

Comparing things to car dealerships in a positive light seems fraught.

sp332• 3 years ago

I think the complaint is not about doing price discrimination, but being misleading about it. Calling an upcharge a "delivery fee" could be fraud if the customer thinks they're paying for the delivery.

horsawlarway2• 3 years ago

This was my thought.

I don't see much functional difference between this and what Disney does with their ticketing systems, or what airlines do.

It's not something I'm glad companies are doing, but it's also not illegal as long as it's not a protected class.

Basically

A: I wish doordash wouldn't do this.

B: phone OS is not a protected class because it is deemed easily changeable.

If you can afford to buy the most expensive hardware as a status symbol, don't be too surprised when companies notice and scale prices accordingly.

dubcanada2• 3 years ago

No tons of companies do this, people charge X for people from poor countries and a much higher Y for people from rich countries. People get paid less because they are from a poor country and more because they are from a rich country.

ketchupdebugger3• 3 years ago

Really depends on if the cost increase is due to Apple taking a cut. Restaurants usually charges more on these delivery apps anyways due to higher fees. It is usually cheaper to call your order into the restaurant and pick up than it is ordering via these app.

Delivery apps are an interesting industry because it seems that no one is making money. Delivery apps are not profitable, delivery people are complaining they are not making enough, restaurants are complaining that they dont make enough via the apps, and customers are complaining of higher costs. The industry doesn't seem sustainable yet it keeps going

SllX• 3 years ago

Somebody’s salary is getting paid, a demand is being supplied and while they may not be making enough, there’s enough money to be made to attract deliverers. The music might one day stop, but it won’t be because anybody really wants it to. At the very worst, DoorDash or something like it might be the best way to put in a pickup order.

richard___• 3 years ago

self driving cars

ketchupdebugger3• 3 years ago

I've seen delivery robots on the streets of Santa Monica, those are wild.

s3p2• 3 years ago

This is not an in-app purchase in the same way a traditional subscription for an app might be processed. This goes entirely through DoorDash, and Apple does not see any % of revenue sent from the user to DD for their order.

boeingUH60• 3 years ago

The industry is surviving on investor cash…DoorDash founders have already cashed out generational wealth, so they’ll be fine whether the grift collapses or not.

chatmasta• 3 years ago

Does it depend on that? It will affect the cost to DoorDash, but if the premise of the lawsuit is unfairness of price discrimination based on device operating system, then I don't see how it's relevant to the end customer that DoorDash pays a different cost for their transaction.

That said, I'm personally skeptical that the premise is even defendable in the first place. Operating system is not a protected class and so I don't see any legal basis for why a company couldn't price discriminate based on it.

sokoloff• 3 years ago

As a shopkeeper, I can offer a discount for cash rather than credit card. Why couldn't I offer a similar discount for some other device characteristic, especially if there's a direct line between that choice and the economics to me?

(I'm agreeing and extending, not disagreeing.)

ketchupdebugger3• 3 years ago

If doordash says we charge a X% fee but then Apple charges Y% on top while android charges no fee then logically it should be higher on Apple. If doordash is saying we charge a higher fee on Apple because Apple users are generally wealthier, thats pretty discriminatory.

dubcanada2• 3 years ago

restaurants are complaining that they dont make enough via the apps

Is this true? I can't think of any reason why a restaurant would put themselves on the app and spend all of that time managing it (Uber/Skip) if they feel they don't make enough?

CaptainZapp• 3 years ago

Some restaurants never allowed to be listed and Door Dash listed them anyway. They were also sued for such shady practices.

From [0]:

"The apps have posted restaurants’ menus and allowed people to order food for delivery by the apps’ drivers — without the restaurants’ permission."

[0] https://www.cpr.org/2021/05/19/restaurants-are-fed-up-with-g...

vinyl7• 3 years ago

Its more about marketing and mindshare. What if mcdonalds was on the apps but not carls jr? You'd rather the customer come to you and deny the other business a customer than to not be there at all

whatarethembits2• 3 years ago

We briefly dabbled into running a takeaway in the UK; these apps have changed customer behaviour such that if you’re not on it, you won’t get much business at all. So it’s not much of a choice; and yes ordering from one of these apps practically sucks all profit margin away, order directly from the place if you can.

jonplackett• 3 years ago

Apple don’t take a cut of physical items

AnthonyMouse5• 3 years ago

Delivery apps are an interesting industry because it seems that no one is making money.

There are a lot of potential industries that have to start out like this.

Suppose you have a downtown where there are a dozen restaurants within a few blocks of each other, and then customers in a residential area on the other side of town. If you try to hire someone to go pick up the food for one person and deliver it to one customer on the other side of town, it's totally hopeless and you'll never make any money.

But if you could get the same driver to pick up meals for a dozen people at once and then deliver them to customers who all live near each other, now you have a chance of turning a profit. That's a chicken and egg problem, because the first customer isn't going to pay the full price of the trip, so you have no first customer and never get enough business going to reach the level of efficiency required.

Now suppose they operate by burning VC money for a while until they get enough usage to turn a profit.

wizofaus4• 3 years ago

All the food delivery riders I see have carrying capacity for 2 or 3 orders at most - there's no way it's a dozen. Most of the time I'm pretty sure they're only carrying a single order.

hotpotamus2• 3 years ago

You've simplified the problem too much. If there was one central cafeteria and orders were limited to certain neighborhoods with largeish time windows, then maybe, but that is not really what it looks like. You can easily sign up to drive for one of these services and see the reality of it, but be prepared to stand around waiting for peoples' orders for around minimum wage once you factor in all the expenses and dead-heading time.

justizin2• 3 years ago

Really depends on if the cost increase is due to Apple taking a cut.

Apple only takes a cut of virtual goods. This is why you cannot buy Kindle books on iOS without going to the website, but you can buy a television.

a13712• 3 years ago

The title doesn't do it justice. These tactics are pretty dishonest I must admit:

Making its "Delivery Fee" seem related to distance or demand, even though none of it goes to the delivery person.

I could see they justify this as value-based pricing. As in, it would have costed more for you to travel farther to get the food from that particular restaurant if you were to order pickup. The thing I find dishonest is labeling this the "delivery fee". I always thought that the money goes at this partially to the deliverer.

Offering an "Express" option that implies faster delivery, but then changing the wording to "Priority" in billing so it is not held to delivery times.
Charging an "Expanded Range Delivery" fee that seems based on distance but is really based on a restaurant's subscription level and demand.

So things that bring no value to the user. The question is, if people know this will they vote with their dollars and move their business elsewhere?

Adding an undisclosed 99 cent "marketing fee," paid by the customer rather than the restaurant, to promote menu items that customers add to their carts.

This one wins the cake. So each user is forced to pay a dollar to promote the items they have ordered from that menu. Let's call this preach-flation?

belter2• 3 years ago

Many rental car companies, will charge you differently if you are picking up a car at certain airports depending on which country you say your residence is. Same car, picked up at the same airport, rented for the same amount of days with same insurances, with invoice issued out of the country where you are picking up the car. Different price...

cobaltoxide• 3 years ago

[citation needed]

I'm skeptical because you can get quotes for rental cars without entering any personal details. I guess they could geolocate based on your IP but it still sounds fishy.

FpUser• 3 years ago

Makes me feel less headache as I do not use delivery for food. I usually cook myself or go and buy ready stuff. If I am too lazy to visit nearest food place then I am not really hungry.

justizin2• 3 years ago

I could see they justify this as value-based pricing. As in, it would have costed more for you to travel farther to get the food from that particular restaurant if you were to order pickup.

If this isn’t going to the driver, it’s absolutely unacceptable. DoorDash does not have to do more work because you would have had to drive further, but the actual driver does have to drive further, and is working for a flat fee.

To hear people on HN say things like this explains exactly why these companies do this. This is absolutely not a reasonable way to think.

a13712• 3 years ago

I'm just saying this is the embodiment of value-based pricing. Like it or not, that's what has made the silicon valley.

stefan_• 3 years ago

We outlaw these things because they deceive the user, thereby making it impossible to 1) know this and 2) vote with their dollars.

BoppreH• 3 years ago

Price discrimination is a great way to reduce customer trust. I have a friend that Uber consistently charges 20% less than me, for the same trip, at the same time, and before any obvious discounts. My best guess is that it's because of a trip to SF with a company card some years ago (high-cost area! Price insensitivity! Ka-ching goes the app). I will probably never learn the truth, but the result is that I avoid using Uber because it makes me feel ripped off.

pinko• 3 years ago

I've found Uber routinely sends me push notifications advertising a fare drop right after I've left the app without confirming a ride in order to check prices on Lyft -- and doesn't do so otherwise, even if I introduce the same delay. I.e., after delaying ride confirmation, if I don't switch apps I am not offered a lower fare, if I do switch apps I am offered a lower fare. So sleazy.

_rs2• 3 years ago

This happened to me once last year and I’ve never been able to reproduce it since, even when actually switching apps to cross check prices

mecha_ghidorah• 3 years ago

I am actually increasingly concerned about the potential for price discrimination to become endemic, widespread, and very impactful. I actually am beginning to think we should be looking into legislating against it.

laweijfmvo• 3 years ago

I got free DoorDash Premium or whatever (free delivery, less service fee) through my Chase card a while back. Don't use it that often, but recently wanted to order something and saw that every restaurant I was interested in "doesn't qualify for free delivery." So that was a total scam.

Edit: This was a recent change, never used to have exceptions like this.

darth_avocado• 3 years ago

I wonder if this is just some experimentation on customer pricing. For example, my partner and I often compare the prices before ordering. Sometimes, we see different delivery rates (both on iPhone, without promo, as non dashpass subscribers).

unreal37• 3 years ago

Is that illegal?

I don't see how you can sue someone over "discrimination based on phone manufacturer".

kirykl• 3 years ago

I think the lawsuit claim is DD fraudulently represents pricing to be based on one thing (distance, etc.)but it seems to be based on other factors, one of which may be phone make

ajdude• 3 years ago

Lawsuit accuses DoorDash of charging iPhone users more than others

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