Doordash: Difference between revisions

Line 12:

*Withholding dashers funds (up to weeks or months) for delivering orders

*Lack of Business transparency especially with delivery fees ~~confusing the consumer~~

*Lack of Business transparency especially with delivery fees and higher menu pricing

*Exposing millions of sensitive dashers and company information in a breach

*Adding restaurants to their platform to order without the business's consent

Line 28:

===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 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".

'''[Needs further clarification] read cite note to expand'''

This is also combined with the fact that Doordash's menu prices are also considerably higher than the original venues that items or commodities could be purchased at.<ref>{{Cite web |last=Mallory |first=Paul |date=2023-08-23 |title=DoorDash Prices Higher Than Menu |url=https://consumergravity.com/doordash-prices-higher-than-menu/ |url-status=live |access-date=2025-05-14 |website=ConsumerGravity}}</ref>

===Data breach exposing millions of dashers and company info<ref name=":2" /><ref name=":5" />===

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The old pay structure that Doordash's PR team was referring to would only show dashers tip amount if it was higher than what Doordash was willing to pay them for that contract batch. In many cases when the tip amount failed to surpass what the company was willing to pay the dasher for the order it was often taken and spread across other orders that may have had a lower initial payout. This ''"old pay structure"'' has impacted over 63,000 New Yorker's alone.

===Using BNPL services to target the financially challenged consumers<ref>{{Cite web |last=Steinberg |first=Brooke |date=2025-03-24 |title=DoorDash now offering eat now, pay later payments through Klarna |url=https://nypost.com/2025/03/24/lifestyle/DoorDash-now-offering-eat-now-pay-later-payments-through-klarna/ |url-status=live |access-date=2025-04-04 |website=New York Post}}</ref>===

===Using BNPL services to target the financially challenged consumers<ref>{{Cite web |last=Steinberg |first=Brooke |date=2025-03-24 |title=DoorDash now offering eat now, pay later payments through Klarna |url=https://nypost.com/2025/03/24/lifestyle/DoorDash-now-offering-eat-now-pay-later-payments-through-klarna/ |url-status=live |access-date=2025-04-04 |website=New York Post}}</ref><ref>{{Cite web |date=2025-03-20 |title=DoorDash Partners with Klarna to Offer US Customers Even More Convenience with Flexible Payments {{!}} DoorDash |url=https://about.doordash.com/en-us/news/doordash-partners-with-klarna |url-status=live |access-date=2025-05-14 |website=Doordash}}</ref>===

As of March 2025, Doordash has decided to partner up with Klarna for BNPL (Buy Now Pay Later) services. This partnership is aimed at the consumers that want food delivery but are currently unable to afford it. However, it's a deceptive practice that can further financially ruin consumers. While BNPL can defer payments interest free, it does charge late fees! Consumers that are already financially strapped for cash may find it difficult to repay these loans if they are not careful. All this just to boost Doordash's profit margins by taking advantage of consumers that are either financially challenged or illiterate.

===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>===

<blockquote>"About eight months after Washington, D.C. placed a 15% cap on third-party delivery commission fees to help restaurants during the pandemic, DoorDash appears to have found a workaround. According to the Washington City Paper, restaurants that use DoorDash’s DashPass subscription feature were sent a notice stating that the cap is “only applicable to Classic orders” and doesn’t apply to the DashPass program."..."DoorDash calls DashPass an “optional, premium offering and separate from DoorDash’s core services.” The company said that beginning Dec. 9, it will begin charging restaurants the contractual rate in their original agreements, City Paper reports. The changes to DashPash charges are part of a limited test in fewer than five cities, including D.C. and cities in the Bay Area."<ref name=":1" /></blockquote>By using this workaround, Doordash has negatively impacted many small businesses and restaurants that operate within the area. They did however allow ''"Merchants can choose to opt out of DashPass at any time, a DoorDash spokesperson said"<ref name=":1" />.'' Though there are many consumers that do use Dashpass due to the savings for users that use their delivery services frequently. By opting out businesses are effectively blacklisting themselves from the users that frequently use the app for deliveries. Doordash's spokesperson justifies this<blockquote>"The spokesperson called delivery fee restrictions a “one-size fits all” solution that impacts the company’s ability to provide quality service and pay. Merchant fees help the company cover business costs like Dasher pay, background checks, occupational Dasher insurance and website upkeep, the spokesperson said."<ref name=":1" /></blockquote>Which apparently the Dashpass subscription that consumers pay does not cover this. This is just an excuse to further pass on costs while maintaining the profits of the subscription and free delivery; which is the main selling point of the subscription service.

This has caught the eye of D.C. Attorney General Karl Racine in December 10 of 2020. As they have sent a cease and desist notice on Tuesday warning Doordash that charging restaurants more than 15% on commissions may violate District laws. The company complied two days later stating they "decided not to charge DC restaurants their contractual DashPass rate at this time."<ref name=":1" />

===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>===

@@ Line 12: / Line 12: @@
 *Withholding dashers funds (up to weeks or months) for delivering orders
-*Lack of Business transparency especially with delivery fees confusing the consumer
+*Lack of Business transparency especially with delivery fees and higher menu pricing
 *Exposing millions of sensitive dashers and company information in a breach
 *Adding restaurants to their platform to order without the business's consent
@@ Line 28: / Line 28: @@
 ===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 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".
+ '''[Needs further clarification] read cite note to expand'''
+This is also combined with the fact that Doordash's menu prices are also considerably higher than the original venues that items or commodities could be purchased at.<ref>{{Cite web |last=Mallory |first=Paul |date=2023-08-23 |title=DoorDash Prices Higher Than Menu |url=https://consumergravity.com/doordash-prices-higher-than-menu/ |url-status=live |access-date=2025-05-14 |website=ConsumerGravity}}</ref>
 ===Data breach exposing millions of dashers and company info<ref name=":2" /><ref name=":5" />===
@@ Line 52: / Line 54: @@
 The old pay structure that Doordash's PR team was referring to would only show dashers tip amount if it was higher than what Doordash was willing to pay them for that contract batch. In many cases when the tip amount failed to surpass what the company was willing to pay the dasher for the order it was often taken and spread across other orders that may have had a lower initial payout. This ''"old pay structure"'' has impacted over 63,000 New Yorker's alone.
-===Using BNPL services to target the financially challenged consumers<ref>{{Cite web |last=Steinberg |first=Brooke |date=2025-03-24 |title=DoorDash now offering eat now, pay later payments through Klarna |url=https://nypost.com/2025/03/24/lifestyle/DoorDash-now-offering-eat-now-pay-later-payments-through-klarna/ |url-status=live |access-date=2025-04-04 |website=New York Post}}</ref>===
+===Using BNPL services to target the financially challenged consumers<ref>{{Cite web |last=Steinberg |first=Brooke |date=2025-03-24 |title=DoorDash now offering eat now, pay later payments through Klarna |url=https://nypost.com/2025/03/24/lifestyle/DoorDash-now-offering-eat-now-pay-later-payments-through-klarna/ |url-status=live |access-date=2025-04-04 |website=New York Post}}</ref><ref>{{Cite web |date=2025-03-20 |title=DoorDash Partners with Klarna to Offer US Customers Even More Convenience with Flexible Payments {{!}} DoorDash |url=https://about.doordash.com/en-us/news/doordash-partners-with-klarna |url-status=live |access-date=2025-05-14 |website=Doordash}}</ref>===
+As of March 2025, Doordash has decided to partner up with Klarna for BNPL (Buy Now Pay Later) services. This partnership is aimed at the consumers that want food delivery but are currently unable to afford it. However, it's a deceptive practice that can further financially ruin consumers. While BNPL can defer payments interest free, it does charge late fees! Consumers that are already financially strapped for cash may find it difficult to repay these loans if they are not careful. All this just to boost Doordash's profit margins by taking advantage of consumers that are either financially challenged or illiterate.
 ===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>===
+<blockquote>"About eight months after Washington, D.C. placed a 15% cap on third-party delivery commission fees to help restaurants during the pandemic, DoorDash appears to have found a workaround. According to the Washington City Paper, restaurants that use DoorDash’s DashPass subscription feature were sent a notice stating that the cap is “only applicable to Classic orders” and doesn’t apply to the DashPass program."..."DoorDash calls DashPass an “optional, premium offering and separate from DoorDash’s core services.” The company said that beginning Dec. 9, it will begin charging restaurants the contractual rate in their original agreements, City Paper reports. The changes to DashPash charges are part of a limited test in fewer than five cities, including D.C. and cities in the Bay Area."<ref name=":1" /></blockquote>By using this workaround, Doordash has negatively impacted many small businesses and restaurants that operate within the area. They did however allow ''"Merchants can choose to opt out of DashPass at any time, a DoorDash spokesperson said"<ref name=":1" />.'' Though there are many consumers that do use Dashpass due to the savings for users that use their delivery services frequently. By opting out businesses are effectively blacklisting themselves from the users that frequently use the app for deliveries. Doordash's spokesperson justifies this<blockquote>"The spokesperson called delivery fee restrictions a “one-size fits all” solution that impacts the company’s ability to provide quality service and pay. Merchant fees help the company cover business costs like Dasher pay, background checks, occupational Dasher insurance and website upkeep, the spokesperson said."<ref name=":1" /></blockquote>Which apparently the Dashpass subscription that consumers pay does not cover this. This is just an excuse to further pass on costs while maintaining the profits of the subscription and free delivery; which is the main selling point of the subscription service.
+This has caught the eye of D.C. Attorney General Karl Racine in December 10 of 2020. As they have sent a cease and desist notice on Tuesday warning Doordash that charging restaurants more than 15% on commissions may violate District laws. The company complied two days later stating they "decided not to charge DC restaurants their contractual DashPass rate at this time."<ref name=":1" />
 ===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>===