What Are The Misleading Customer Claims Against DoorDash? Lawsuit Explained

DoorDash is facing a lawsuit from Canada’s Competition Bureau, which accuses the food delivery platform of misleading customers through a pricing tactic which is known as “drip pricing.” The Bureau claims that DoorDash has collected around $1 billion in hidden mandatory fees from Canadian users over the past decade, reported TheStreet.

Drip pricing is when a company shows and advertises a lower price but then adds extra charges later in the checkout process. The Bureau says that DoorDash’s advertised prices do not include service, delivery, and other mandatory fees that appear only at the end of the order process. It also alleges that some of these fees are made to look like taxes, even though they are not actually government-imposed.

“The company has been engaging in the alleged conduct for close to a decade,” the Bureau said in a statement. The lawsuit was filed with Canada’s Competition Tribunal and is asking for financial penalties, a stop to the pricing practice, and refunds for affected customers.

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DoorDash has denied the claims, calling the lawsuit “misguided and excessive.” A spokesperson told TheStreet, “Transparency with customers is a top priority at DoorDash. All fees on DoorDash, which support the high-quality operations of our platform, are clearly labeled and disclosed to consumers through the ordering process - including a final review before payment. To be crystal clear, DoorDash does not hide fees from consumers or mislead them in any way.”

The Bureau says that its investigation found that DoorDash often hides these fees until the customer reaches the end of the transaction. HT reported that a similar lawsuit in the US in 2023 also accused the company of using extra fees labeled as “regulatory response” or “city fees” to make them appear as official taxes, while the money was actually kept by DoorDash.