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?
> 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.
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...
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.
Here is my citation...You can try yourself. It's even worst than I remember. Make sure to always use Incognito mode, a different browser and if possible a VPN arriving from different locations.
-> Pickup Car At Florence Aiport at 12:00 -> Next Monday the 29 May -> Return next Friday the 2 of June at 12:00
You will notice the webpage has in the beginning a prominent "I Live In". Here are some quotes for the same model AUDI Q5 AUTOMATIC and time period.
"I live in The Netherlands" -> €287.49 / day
"I live in Greece" -> €318.64 / day
"I live in Jamaica" -> "Sorry, there’s no vehicle available at:" -> When two seconds before there was...And suddenly there is when you say you live in Germany....I know....It's incredible :-))
At least in my experience the price online includes any/all “airport fees” (not named that, but for the sake of simplification) and when you pick up the car and prove that you live locally (ie are not using the airport) they will void those fees, but only usually if I ask
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.
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
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.
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.
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.
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?
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.
> 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.
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.
Frequently there is a section of town with a bunch of takeout restaurants in the same block. And people want to order takeout for lunch around noon and dinner in the early evening. The app could then assign drivers the customers in the same area as one another, if there were more of them.
The people making deliveries are doing unskilled labor. It was never expected to pay well. The question is if it can work at all.
The apps absolutely already do merge any orders they can. They can't control conditions at the restaurant or on the road however and so a lot of the job is really being a flunky and waiting in line and in traffic which are both quite high around lunch and early evening. It scales very poorly and you probably don't want your order sitting in someone's car for half an hour while they wait for another customer's order.
As far as paying well, I don't think that was ever really expected, but these companies just seem like losers for all but those who managed to cash out in the IPO.
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.
But how would they get to that sort of carrying capacity? They almost never use cars around here and I doubt it would be viable (parking issues, cost of vehicle ownership/maintenance etc.).
And if battery prices continue to decline, electric "motorcycles" (i.e. 3-wheeled cars) with low maintenance costs will be available for similar prices.
If that were a feasible option I'd think we'd be seeing at least some already in use (actually the postal service here does use vehicles not unlike that). They still take up a lot more space to park and are subject more to traffic congestion than the e-bikes/scooters actually used.
> If that were a feasible option I'd think we'd be seeing at least some already in use
First you'd need enough customer traffic to fill the vehicle. There is no point in buying a vehicle that can serve 12 customers if you never get more than 4 at once.
Space to park doesn't seem like a huge problem when they're making deliveries. The mail truck is bigger than these things. Buildings with tight parking commonly have a loading zone or a space with a 15 minute limit specifically for deliveries, and it's big enough for a light truck.
It absolutely is for pick ups though, many restaurants in our area have almost no parking available at peak times. The delivery riders just leave their bikes on the footpath/sidewalk.
Larger delivery vehicles can make use of loading zones but even then it'd only be feasible for a very small number of them. My point is there's no sign these delivery companies are expecting to be able to significantly educe costs by combining deliveries and using larger vehicles, and it's hard to see how it would be feasible.
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.
> 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?
This happened back in 2019 with a restaurant I have a stake in. We did not enter into an agreement with Door Dash. Door Dash would call and place a pick-up order. The driver would come in and attempt to pay for the order with a debit card. The card got declined. Another (exactly the same order) gets called in, a different driver shows up - card got declined.
Staff thought it was a scam. They noticed the same type of debit card was used for both orders. Finally a driver informed us it was a door dash order. They scraped an old menu online with outdated prices, and loaded the debit card with the amount they calculated from the outdated menu.
Staff called back the phone number that placed the orders, explained the issue, and let Door Dash know there were 2 orders (sitting for over an hour, no longer saleable) that they owed [amount] for before we would take any additional orders from them, and that they needed to pay in advance over the phone before we would make any more food for them. Horrible experience, would never do business with them.
Some of these delivery apps have gone so far as to create fake websites for restaurants and hijacked Yelp and Google Maps location entries to drive customers to use the app to place their order.
Then they go to the restaurant and say "We're generating this much business for you... if you give us a cut, we'll generate more" and the spiral starts.
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.
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
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.
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.
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.
(Non-practicing) Lawyer here. Interesting for them to bring the case, because offhand I'm struggling to figure out what they believe to be illegal or discriminatory according to the law.
We have a ton of law on the books on the things that ARE illegal to discriminate on (protected classes), and none strike me as particularly close to this.
My "consumer protection" self loves to see companies get taken to task on this sort of thing, but I really don't see what law they think they have to stand on here.
> Whether DoorDash, in adopting, promoting, and/or charging its Delivery Fee, misrepresented material facts to consumers, like Plaintiffs, including the fact that:
> o Dashers did not receive the Delivery Fee for their deliveries and that DoorDash retained the Delivery Fee completely;
> o DoorDash knew or should have known that its advertising tactics regarding discounts on the Delivery Fee were misleading;
> o DoorDash knew or should have known the Delivery Fee had nothing to do with the delivery of orders for consumers, like Plaintiffs, but instead related to the alleged cost to operate DoorDash’s technology;
Personally, I'd be happy if labeling something with a common english meaning but the something doesn't reflect that common meaning counted as fraud when financial gain was involved.
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.
HN isn't the source though. the two articles I can remember are sfgate.com, readership in around 30 millon/month, and ars Technica, which is a fairly popular site, though I don't have stats for them.
That still doesn't sound a terrible situation for door dash considering the global reach. Not sure about sfgate, but ars would be a pretty niche group as well
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.
Traditionally this is how markets worked. Every purchase was individually negotiated. It's only in recent times that uniform "consumer" pricing was even invented.
> ...no matter which arbitrary metric is being used as justification for squeezing every last possible penny out of you.
This is how free markets are supposed to work. The seller seeks to maximize the price and the buyer seeks to minimize it. Lazy buyers who don't bother checking the competition can expect to pay more.
The problem occurs when there is limited competition. In that situation I'm in favor of regulation (as well as to protect certain classes of people such as race, gender etc). But I don't think that's a problem in this case - or at least, that's not what you're arguing?
Depends, does the android user in the example use all of them at once? Then yes. If not it's an unhealthy relationship. Still better than the abusive marriage that is the apple ecosystem.
I don't know what they do today, they probably fixed it. But a company that actively hides any other devices from bluetooth pairing but their own is ridiculously user hostile. I don't understand how they get away with it, some even argue it's a feature.
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.
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.
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.
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.
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.
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.
From the lawsuit quoting Door Dash terms and conditions...
> DoorDash is not in the delivery business, does not provide delivery services, and is not a common carrier. DoorDash provides the Services to facilitate the transmission of orders by Users to Merchants, including orders for pickup or delivery by Contractors and/or Merchants.
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
If people want to keep ordering takeout despite all these fees, is it not on them to vote with their dollars? It's also well known that iPhone users pay more than Android users, so I don't see why this sort of price discrimination would be bad, per se, much less illegal (what protected classes are being infringed upon here?), because, again, simply stop ordering takeout if the price is too high.
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).
There’s this thing called travel, where one might go to a different city or country via a car/motorcycle/train/plane. Often people end up staying at “temporary houses” where you’d have access to a bed and a bathroom. But often these don’t include a kitchen. Now for reasons that might be difficult to understand, these people often choose to consume food while they’re away from home, as opposed to just taking a bit of break from eating until they’re back. In situations like that, among others, ordering online appears as a decent option.
Here’s another perspective:
Having a young child eats up every free moment. Being able to order a wide variety of tasty food with a few taps has been truly life-changing.
> 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?