Doordash: Difference between revisions
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Adding restaurants to their platform without other business's consent: added elaboration on the section |
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*Adding restaurants to their platform to order without the business's consent | *Adding restaurants to their platform to order without the business's consent | ||
*Using driver tips to cover the cost of other deliveries | *Using driver tips to cover the cost of other deliveries | ||
* | *Using [https://wiki.rossmanngroup.com/wiki/Buy_Now_Pay_Later BNPL] (Buy Now Pay Later) services to target the financially challenged consumers | ||
*Using AI to falsely advertise what menu items look like | |||
*Subsidizing Dashpass subscriptions by passing commission rates onto business's | *Subsidizing Dashpass subscriptions by passing commission rates onto business's | ||
*Multiple losses settling lawsuits due to unfair business practices | *Multiple losses settling lawsuits due to unfair business practices | ||
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===Charging users multiple unclear "fees" for delivery=== | ===Charging users multiple unclear "fees" for delivery=== | ||
Like many businesses Doordash does need to cover expenses that the company has. The issue lies with the transparency of how they do business with the customer base within their app. Many consumers have taken a legal class action lawsuit against Doordash.<ref name=":4">{{Cite web |last=Mayer |first=Chloe |date=2023-06-09 |title=DoorDash Faces $1B Lawsuit Over Delivery Fees: 'Dupes Naive Consumers' - Newsweek |url=https://www.newsweek.com/lawsuit-doordash-sue-iphone-android-1805387 |url-status=live |access-date=2025-04-04 |website=Newsweek}}</ref> The suit alleges Doordash's algorithm and pricing model changes | Like many businesses Doordash does need to cover expenses that the company has. The issue lies with the transparency of how they do business with the customer base within their app. Many consumers have taken a legal class action lawsuit against Doordash.<ref name=":4">{{Cite web |last=Mayer |first=Chloe |date=2023-06-09 |title=DoorDash Faces $1B Lawsuit Over Delivery Fees: 'Dupes Naive Consumers' - Newsweek |url=https://www.newsweek.com/lawsuit-doordash-sue-iphone-android-1805387 |url-status=live |access-date=2025-04-04 |website=Newsweek}}</ref> The suit alleges Doordash's unfair Value based pricing by leveraging their algorithm and pricing model changes on a per customer basis; and not what they order. Specific examples include: delivery fee, any form of a hidden marketing fee or hidden commission fee.<ref name=":4" /> Doordash has denied all alleged claims referring to it as a "copy-and-paste job". | ||
===Data breach exposing millions of dashers and company info<ref name=":2" /><ref name=":5" />=== | ===Data breach exposing millions of dashers and company info<ref name=":2" /><ref name=":5" />=== | ||
| Line 33: | Line 34: | ||
|+Breached Data that was exposed | |+Breached Data that was exposed | ||
!Customers | !Customers | ||
!name, email and delivery addresses, order history, phone numbers, hashed | !name, email and delivery addresses, order history, phone numbers, hashed & salted passwords and the last four digits of their payment cards taken. | ||
|- | |- | ||
|Dashers | |Dashers | ||
|last four digits of their bank account numbers stolen | |last four digits of their bank account numbers stolen, Approximately 100,000 had their drivers license stolen. | ||
|- | |- | ||
|Companies | |Companies | ||
|last four digits of their bank account numbers stolen | |last four digits of their bank account numbers stolen | ||
|} | |} | ||
Many consumers complained the year before about their account being hacked. But were assured by Doordash that it was not a breach and "claimed attackers were running credential stuffing attacks". This shows they did not take customers reports seriously and had a breach shortly after due to the companies opsec negligence. | Many consumers complained the year before about their account being hacked. But were assured by Doordash that it was not a breach and "claimed attackers were running credential stuffing attacks". This shows they did not take customers reports seriously and had a breach shortly after due to the companies opsec negligence. | ||
===Adding restaurants to their platform without other business's consent<ref name=":5">{{Cite web |last=Coban |first=Erkin |date=2025-04-08 |title=DoorDash Fees and Commissions for Restaurants: Detailed 2025 Guide - Restaurant Success Blog {{!}} Menuviel |url=https://blog.menuviel.com/doordash-fees-and-commissions-for-restaurants/ |url-status=live |website=Menuviel}}</ref><ref name=":2">{{Cite web |date=2025-04-08 |title=DoorDash - Wikipedia |url=https://en.wikipedia.org/wiki/DoorDash |url-status=live |access-date=2025-04-08 |website=Wikipedia}}</ref><ref>{{Cite web |last=Pershan |first=Caleb |date=2020-01-29 |title=Delivery Apps Keep Adding Restaurants Without Their Consent - Eater |url=https://www.eater.com/2020/1/29/21113416/grubhub-seamless-kin-khao-online-delivery-mistake-doordash |url-status=live |access-date=2025-04-04 |website=EATER}}</ref><ref>{{Cite web |last=Settembre |first=Jeanette |date=2020-01-21 |title=DoorDash, Grubhub skewered by small restaurants for posting menus without permission {{!}} Fox Business |url=https://www.foxbusiness.com/small-business/doordash-grubhub-restaurant-listing-without-permission.amp |url-status=live |access-date=2025-04-09 |website=Fox Business}}</ref>=== | ===Adding restaurants to their platform without other business's consent<ref name=":5">{{Cite web |last=Coban |first=Erkin |date=2025-04-08 |title=DoorDash Fees and Commissions for Restaurants: Detailed 2025 Guide - Restaurant Success Blog {{!}} Menuviel |url=https://blog.menuviel.com/doordash-fees-and-commissions-for-restaurants/ |url-status=live |website=Menuviel}}</ref><ref name=":2">{{Cite web |date=2025-04-08 |title=DoorDash - Wikipedia |url=https://en.wikipedia.org/wiki/DoorDash |url-status=live |access-date=2025-04-08 |website=Wikipedia}}</ref><ref name=":6">{{Cite web |last=Pershan |first=Caleb |date=2020-01-29 |title=Delivery Apps Keep Adding Restaurants Without Their Consent - Eater |url=https://www.eater.com/2020/1/29/21113416/grubhub-seamless-kin-khao-online-delivery-mistake-doordash |url-status=live |access-date=2025-04-04 |website=EATER}}</ref><ref name=":7">{{Cite web |last=Settembre |first=Jeanette |date=2020-01-21 |title=DoorDash, Grubhub skewered by small restaurants for posting menus without permission {{!}} Fox Business |url=https://www.foxbusiness.com/small-business/doordash-grubhub-restaurant-listing-without-permission.amp |url-status=live |access-date=2025-04-09 |website=Fox Business}}</ref>=== | ||
Starting around 2020 Doordash had decided that the company needed more outreach. To do this the company started adding business that had no arrangements for takeout or delivery without the owners consent.<ref name=":6" /><ref name=":7" /> This has led to increased stress on businesses that were not ready for a higher influx of volume orders but also being charged up to 30% in referral fees depending on the business.<ref name=":5" /><ref name=":7" /> Many small cooperation's and restaurants were impacted the most due to these policies; mostly because profit margins are usually lower than a multi billion dollar franchise that has been tailored to do takeout for decades or industry chains that are used to higher order volumes. Behavior like this may end up running smaller unprepared business operations to close permanently leaving only the bigger cooperation's to compete for the consumers purchasing power. | |||
===Pocketing driver app tips to payout other dashers<ref name=":0">{{Cite web |last=Glenn |first=Lindey |date=2025-03-31 |title=DoorDash’s $1 BILLION Lawsuit: Exposing DoorDash’s Predatory Business Model |url=https://www.youtube.com/watch?v=A-gPld7e3do |url-status=live |access-date=2025-04-04 |website=Youtube}}</ref><ref>{{Cite web |last=Calvario |first=Liz |date=2025-02-25 |title=DoorDash Settlement: Millions to Be Paid to Drivers For Pocketed Tips |url=https://www.today.com/food/news/doordash-settlement-payout-rcna193728 |url-status=live |access-date=2025-04-08 |website=TODAY}}</ref>=== | ===Pocketing driver app tips to payout other dashers<ref name=":0">{{Cite web |last=Glenn |first=Lindey |date=2025-03-31 |title=DoorDash’s $1 BILLION Lawsuit: Exposing DoorDash’s Predatory Business Model |url=https://www.youtube.com/watch?v=A-gPld7e3do |url-status=live |access-date=2025-04-04 |website=Youtube}}</ref><ref>{{Cite web |last=Calvario |first=Liz |date=2025-02-25 |title=DoorDash Settlement: Millions to Be Paid to Drivers For Pocketed Tips |url=https://www.today.com/food/news/doordash-settlement-payout-rcna193728 |url-status=live |access-date=2025-04-08 |website=TODAY}}</ref>=== | ||
| Line 50: | Line 52: | ||
===Using Dashpass subscription model to surcharge business's on order commissions<ref name=":1">{{Cite web |last=Kelso |first=Alicia |date=2020-12-07 |title=DoorDash hit with cease-and-desist letter from DC attorney general {{!}} Restaurant Dive |url=https://www.restaurantdive.com/news/doordash-could-use-dashpash-as-a-workaround-to-delivery-fee-caps/591701/ |url-status=live |access-date=2025-04-04 |website=Restaurant Dive}}</ref>=== | ===Using Dashpass subscription model to surcharge business's on order commissions<ref name=":1">{{Cite web |last=Kelso |first=Alicia |date=2020-12-07 |title=DoorDash hit with cease-and-desist letter from DC attorney general {{!}} Restaurant Dive |url=https://www.restaurantdive.com/news/doordash-could-use-dashpash-as-a-workaround-to-delivery-fee-caps/591701/ |url-status=live |access-date=2025-04-04 |website=Restaurant Dive}}</ref>=== | ||
===Using AI to falsely advertise what menu items look like<ref>{{Cite web |date=2025-04-09 |title=DoorDash Unveils Suite of AI-Powered Tools to Enhance Online Menus and Streamline Merchant Operations |url=https://about.doordash.com/en-us/news/doordash-unveils-ai-powered-tools-to-enhance-online-menus-and-streamline-merchant-operations |url-status=live |access-date=2025-04-11 |website=Doordash}}</ref><ref>{{Cite web |last=Baker |first=Alex |date=2024-02-28 |title=The photos that you see on food delivery apps are probably AI |url=https://www.diyphotography.net/ghost-kitchens-using-ai-images-on-food-delivery-apps/ |url-status=live |access-date=2025-04-11 |website=DiyPhotography}}</ref><ref>{{Cite web |last=Canton |first=Rafael |date=2023-04-07 |title=The picture of that food you’re ordering online may have been created by AI |url=https://www.fastcompany.com/90870969/food-delivery-startup-ai-photos-swipeby |url-status=live |access-date=2025-04-11 |website=FastCompany}}</ref>=== | |||
===Settling lawsuits due to unlawful business practices<ref name=":2" />=== | ===Settling lawsuits due to unlawful business practices<ref name=":2" />=== | ||
Latest revision as of 00:36, 15 April 2025
| Basic information | |
|---|---|
| Founded | 2013 |
| Type | Public |
| Industry | Online Delivery |
| Official website | https://www.doordash.com/ |
DoorDash was founded in June 2013, initially starting as PaloAltoDelivery.com before rebranding to Doordash. The company was founded by three Stanford students Tony Xu, Andy Fang, and Stanley Tang. Its focus is delivery on a wide variety of items, some items include fresh meals from nearby restaurants, groceries, convenience store items, OTC (Over the Counter) medicines, flowers, etc... This service mainly operates in locations within the U.S. (United States), Canada, and Australia.
Consumer-impact summary[edit | edit source]
Over the years of operation DoorDash has found itself in many controversial consumer and workers violations. Some of the most notable being:
- Withholding dashers funds (up to weeks or months) for delivering orders
- Lack of Business transparency especially with delivery fees confusing the consumer
- Exposing millions of sensitive dashers and company information in a breach
- Adding restaurants to their platform to order without the business's consent
- Using driver tips to cover the cost of other deliveries
- Using BNPL (Buy Now Pay Later) services to target the financially challenged consumers
- Using AI to falsely advertise what menu items look like
- Subsidizing Dashpass subscriptions by passing commission rates onto business's
- Multiple losses settling lawsuits due to unfair business practices
Incidents[edit | edit source]
Withholding funds for contracted drivers[edit | edit source]
According to Doordash,
"Dashers get paid on a weekly basis for all deliveries or tasks completed between Monday - Sunday of the previous week (ending Sunday at midnight local time). Payments are transferred directly to your bank account through Direct Deposit and usually take 2-3 days to show up in your bank account, so payments will appear by Wednesday night."[1]
Even though they are treated like contractors they are still payed within a weekly basis instead of a quota based system. Many users who contract with Doordash need funds quickly to be able to cover daily expenses. This puts the dashers in a tough spot relying on cash tips if any to continue to get by until they are able to retrieve their weekly pay. However Doordash has already thought of this and created Fastpay.
"Fast Pay allows Dashers to cash out their earnings daily for a small fee of $1.99. This means that Dashers can receive their earnings on demand through DoorDash, rather than waiting for their weekly direct deposit or using a third party service."[1]
By holding holding dashers funds they are incurring free interest on the money by not paying out the dasher as soon as a delivery is completed. By taking advantage of desperate workers they can make more money off of the original transaction.
Charging users multiple unclear "fees" for delivery[edit | edit source]
Like many businesses Doordash does need to cover expenses that the company has. The issue lies with the transparency of how they do business with the customer base within their app. Many consumers have taken a legal class action lawsuit against Doordash.[2] The suit alleges Doordash's unfair Value based pricing by leveraging their algorithm and pricing model changes on a per customer basis; and not what they order. Specific examples include: delivery fee, any form of a hidden marketing fee or hidden commission fee.[2] Doordash has denied all alleged claims referring to it as a "copy-and-paste job".
Data breach exposing millions of dashers and company info[3][4][edit | edit source]
In mid 2019 Doordash suffered a data breach that effected 4.9 million customers, drivers and businesses sensitive information combined. Individuals that had joined Doordash after April 5th of 2018 were not effected. this breach took 5 months to be found. Doordash claims that "a third-party service provider," was to blame for this leak, but the third party was never named. The contents of the data exposed has been disclosed with this chart below.
| Customers | name, email and delivery addresses, order history, phone numbers, hashed & salted passwords and the last four digits of their payment cards taken. |
|---|---|
| Dashers | last four digits of their bank account numbers stolen, Approximately 100,000 had their drivers license stolen. |
| Companies | last four digits of their bank account numbers stolen |
Many consumers complained the year before about their account being hacked. But were assured by Doordash that it was not a breach and "claimed attackers were running credential stuffing attacks". This shows they did not take customers reports seriously and had a breach shortly after due to the companies opsec negligence.
Adding restaurants to their platform without other business's consent[4][3][5][6][edit | edit source]
Starting around 2020 Doordash had decided that the company needed more outreach. To do this the company started adding business that had no arrangements for takeout or delivery without the owners consent.[5][6] This has led to increased stress on businesses that were not ready for a higher influx of volume orders but also being charged up to 30% in referral fees depending on the business.[4][6] Many small cooperation's and restaurants were impacted the most due to these policies; mostly because profit margins are usually lower than a multi billion dollar franchise that has been tailored to do takeout for decades or industry chains that are used to higher order volumes. Behavior like this may end up running smaller unprepared business operations to close permanently leaving only the bigger cooperation's to compete for the consumers purchasing power.
Pocketing driver app tips to payout other dashers[7][8][edit | edit source]
Using BNPL services to target the financially challenged consumers[9][edit | edit source]
Using Dashpass subscription model to surcharge business's on order commissions[10][edit | edit source]
[edit | edit source]
Settling lawsuits due to unlawful business practices[3][edit | edit source]
Products[edit | edit source]
Dashpass (2018 - Present)[edit | edit source]
A premium program offered by Door Dash. This program offers free delivery on orders greater than $12 along with reduced service fees for deliveries. By paying the subscription price Doordash advertises this program as a cost saving measure for consumers that use their app frequently. This offer however has been subject to a variety of criticism. One of the more popular cases being hit with a cease-and-desist letter from DC attorney general for charging more than 15% on commissions to make up the losses of the companies free delivery policy with Dashpass.[10]
See also[edit | edit source]
References[edit | edit source]
- ↑ 1.0 1.1 "When do Dashers get paid?". Doordash. 2025-04-08. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ 2.0 2.1 Mayer, Chloe (2023-06-09). "DoorDash Faces $1B Lawsuit Over Delivery Fees: 'Dupes Naive Consumers' - Newsweek". Newsweek. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ 3.0 3.1 3.2 "DoorDash - Wikipedia". Wikipedia. 2025-04-08. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ 4.0 4.1 4.2 Coban, Erkin (2025-04-08). "DoorDash Fees and Commissions for Restaurants: Detailed 2025 Guide - Restaurant Success Blog | Menuviel". Menuviel.
{{cite web}}: CS1 maint: url-status (link) - ↑ 5.0 5.1 Pershan, Caleb (2020-01-29). "Delivery Apps Keep Adding Restaurants Without Their Consent - Eater". EATER. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ 6.0 6.1 6.2 Settembre, Jeanette (2020-01-21). "DoorDash, Grubhub skewered by small restaurants for posting menus without permission | Fox Business". Fox Business. Retrieved 2025-04-09.
{{cite web}}: CS1 maint: url-status (link) - ↑ Glenn, Lindey (2025-03-31). "DoorDash's $1 BILLION Lawsuit: Exposing DoorDash's Predatory Business Model". Youtube. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ Calvario, Liz (2025-02-25). "DoorDash Settlement: Millions to Be Paid to Drivers For Pocketed Tips". TODAY. Retrieved 2025-04-08.
{{cite web}}: CS1 maint: url-status (link) - ↑ Steinberg, Brooke (2025-03-24). "DoorDash now offering eat now, pay later payments through Klarna". New York Post. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ 10.0 10.1 Kelso, Alicia (2020-12-07). "DoorDash hit with cease-and-desist letter from DC attorney general | Restaurant Dive". Restaurant Dive. Retrieved 2025-04-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ "DoorDash Unveils Suite of AI-Powered Tools to Enhance Online Menus and Streamline Merchant Operations". Doordash. 2025-04-09. Retrieved 2025-04-11.
{{cite web}}: CS1 maint: url-status (link) - ↑ Baker, Alex (2024-02-28). "The photos that you see on food delivery apps are probably AI". DiyPhotography. Retrieved 2025-04-11.
{{cite web}}: CS1 maint: url-status (link) - ↑ Canton, Rafael (2023-04-07). "The picture of that food you're ordering online may have been created by AI". FastCompany. Retrieved 2025-04-11.
{{cite web}}: CS1 maint: url-status (link)