The food delivery business is booming. From Grubhub and Seamless to Caviar and Eat24, there is no shortage of places to order pizza or pad Thai from. But one food delivery app has been in hot water lately for misleading customers about their pricing structure, and now, after a couple lawsuits, DoorDash is ready to be up-front and honest about how much their charging to deliver your burger.
According to Bloomberg, the current version of the DoorDash app features food items that cost significantly more than they do when sold by the restaurants themselves. And while this may sound like a beneficial relationship for restaurants to charge more for their food if you’re getting it delivered, its not. DoorDash doesn’t get consent, or even tell the restaurants that they will be charging more for dishes. Instead they raised the prices, and took the profits as service fees, on top of their $5.99 delivery fee.
Understandably, restaurants and customers alike were not pleased. Mario Pesce, owner of La Panineria in New York, who’s burrata panini goes for $15 in-store, but $21.95 on DoorDash, told Eater about his displeasure with the delivery service in November;
“If [customers] see the higher price, they will get upset,” Pesce says. “It’s very bad.”
DoorDash, like many other delivery apps, hires their own delivery people, and deliver from restaurants that traditionally don’t offer straight-to-your-door service. For some restaurants, the decision not to deliver is deliberate and strategic. Take In-N-Out, who sued DoorDash at the end of last year, over trademark infringement. The burger company didn’t want DoorDash delivering their food, as they had no control over the food handling, something the company prides itself on.
In a similar case, Legal Seafood in Boston sued DoorDash last month, a case that may have been the move that put enough pressure on DoorDash to change their ways. “We will soon announce a change to be more transparent. We will list our service fee as a separate cost from menu prices in a few weeks,” DoorDash CEO Tony Xu told Bloomberg this week.
Xu didn’t indicate what that meant specifically, so we’ll have to wait for the new app update to see, but our guess is that DoorDash will fall in line with its competitors and just list service fees separate from food costs, keeping restaurants happy and customers at least clearly informed of where their money is going.