Doordash: Difference between revisions
SoulReaper (talk | contribs) m Grammar/wording/punctuation |
Add more cases, god citing stuff is such a pain in the ass I WANT AUTOCITE TO WORK SO BADLY, there are in fact about 7-8 cases that I'd consider that need to be covered still needs some overhaul but for the most part it is almost finished |
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This is combined with the fact that Doordash's menu prices are also considerably higher than those of the original venues where items could be purchased. "Without letting consumers know, DoorDash is able to raise the prices of menu items in order to turn a greater profit."<ref name=":9">{{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> leaving consumers none the wiser unless they actually checked by either visiting a company site (which may not be possible due to them handling takeout) or going in person to check their pricing. This leaves the consumer completely unaware that they are being overcharged on the goods being provided by the service. While some restaurants have admitted to allowing price increases for delivery, in some cases "this is even done without the restaurant’s permission. Which means that they are also not receiving any of the extra money."<ref name=":9" /> leaving Doordash to pocket all the extra profit for itself on top of all the other fees it charges for it's services. | This is combined with the fact that Doordash's menu prices are also considerably higher than those of the original venues where items could be purchased. "Without letting consumers know, DoorDash is able to raise the prices of menu items in order to turn a greater profit."<ref name=":9">{{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> leaving consumers none the wiser unless they actually checked by either visiting a company site (which may not be possible due to them handling takeout) or going in person to check their pricing. This leaves the consumer completely unaware that they are being overcharged on the goods being provided by the service. While some restaurants have admitted to allowing price increases for delivery, in some cases "this is even done without the restaurant’s permission. Which means that they are also not receiving any of the extra money."<ref name=":9" /> leaving Doordash to pocket all the extra profit for itself on top of all the other fees it charges for it's services. | ||
===Data breach exposing millions of dashers and company info<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 | ===Data breach exposing millions of dashers and company info<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>=== | ||
In mid 2019, Doordash suffered a data breach that affected 4.9 million customers, drivers, and businesses sensitive information combined. Individuals that had joined Doordash after April 5th of 2018 were not affected. 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 types of data exposed is listed in the chart below. | In mid 2019, Doordash suffered a data breach that affected 4.9 million customers, drivers, and businesses sensitive information combined. Individuals that had joined Doordash after April 5th of 2018 were not affected. 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 types of data exposed is listed in the chart below. | ||
{| class="wikitable" | {| class="wikitable" | ||
|+<big>Breached Data that was exposed</big> | |+<big>Breached Data that was exposed</big> <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> | ||
!Customers | !Customers | ||
|name, email and delivery addresses, order history, phone numbers, hashed & salted passwords and the last four digits of their payment cards taken. | |name, email and delivery addresses, order history, phone numbers, hashed & salted passwords and the last four digits of their payment cards taken. | ||
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Starting around 2020, Doordash had decided that the company needed more outreach. To do this, the company started adding businesses that had no arrangements for takeout or delivery without the owners consent.<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> 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 corporations 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 corporations to compete for the consumers' purchasing power. | Starting around 2020, Doordash had decided that the company needed more outreach. To do this, the company started adding businesses that had no arrangements for takeout or delivery without the owners consent.<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> 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 corporations 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 corporations 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 | ===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=James |first=Letitia |date=2025-02-24 |title=Attorney General James Secures $16.75 Million from DoorDash for Cheating Delivery Workers Out of Tips |url=https://ag.ny.gov/press-release/2025/attorney-general-james-secures-1675-million-doordash-cheating-delivery-workers |url-status=live |access-date=2025-05-09 |website=NY GOV}}</ref>=== | ||
In February 24 of 2025, a press release statement New York Attorney General Letitia James released the results of their investigation stating that Doordash, between May 2017 and September 2019,<blockquote>“used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned.”<ref name=":8" /></blockquote>Doordash has lost this lawsuit and was ordered to pay a hefty sum for mistreating the contractors about transparent pay as seen below: <blockquote>"DoorDash will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments."<ref name=":8" /></blockquote>Doordash has responded to the litigation loss by stating it was an ''"old pay structure"'' as they are currently using a newer one where contractors keep all their tips. | In February 24 of 2025, a press release statement New York Attorney General Letitia James released the results of their investigation stating that Doordash, between May 2017 and September 2019,<blockquote>“used customer tips to offset the base pay it had already guaranteed to workers, instead of giving workers the full tips they rightfully earned.”<ref name=":8">{{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></blockquote>Doordash has lost this lawsuit and was ordered to pay a hefty sum for mistreating the contractors about transparent pay as seen below: <blockquote>"DoorDash will pay $16.75 million in restitution for Dashers and up to $1 million in settlement administrator costs to help issue the payments."<ref name=":8" /></blockquote>Doordash has responded to the litigation loss by stating it was an ''"old pay structure"'' as they are currently using a newer one where contractors keep all their tips. | ||
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. | 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><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> | ===Using BNPL services to target the financially challenged consumers=== | ||
As of March 2025, Doordash has decided to partner up with Klarna for BNPL (Buy Now Pay Later) services.<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> 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. This may boost Doordash's profits by taking advantage of consumers that are not financially savvy. | |||
===Using Dashpass subscription model to surcharge business's on order commissions | ===Using Dashpass subscription model to surcharge business's on order commissions=== | ||
<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. | <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">{{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>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 on December 10 of 2020. 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" /> | This has caught the eye of D.C. Attorney General Karl Racine on December 10 of 2020. 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 | ===Using AI to falsely advertise what menu items look like=== | ||
With many menus, consumers expect an accurate description of what they are ordering along with the ingredients that are being used to make it. In recent years companies have started relying on AI to generate a description and a complimentary photo of what the dish should look like. But in many cases this was done to falsely advertise to boost sales. We can look to an earlier instance during the lock down when ghost kitchens were popular;<blockquote>"Ghost kitchens are allegedly using AI-generated images on food delivery sites such as GrubHub and DoorDash. The images are used to promote online orders from kitchens that solely sell their food via online delivery services. Rather than using real photographers, they are using images of food that do not exist."<ref name=":11" /></blockquote>Of which many delivered products that did not match the item description at all or was poorer quality than what was shown to them within ordering. Not to mention in many countries<blockquote>"there are firm advertising laws that state exactly what you have to show and what can be substituted in food photography. This helps protect consumers, making sure they get what they order."<ref name=":11" /></blockquote>Meaning when generating a picture of food it is not considered edible by many countries standards and may even be illegal. But industries are constantly changing; custom diffusion models being packaged like Swipeby to provide cheap alternatives to make selling menu items at a higher volume.<blockquote>"The company points to a survey from Snappr, a photography and visual content platform, that found high-quality food photos can increase orders on restaurant delivery apps by 35%."<ref name=":12" /></blockquote>By seeing the results that such a tool can provide shows how pressing it can be for other businesses to compete if they are not also resorting to the same measures. During this time Doordash had policies about having generative photos for menu items; the founder however thinks things will change soon as he said "Give it six months, that will change,” he says. “I will bet money on it. Because with AI generation right now, it makes so much sense."<ref name=":12" /> And as of 2025 Doordash has launched it's own tool for generating AI menus on it's platform which is able to generate descriptions and pictures of an item being listed.<blockquote>''“At DoorDash, we believe AI should make life easier for restaurants—not more complicated. It’s about using automation to enhance the guest experience while keeping the operator’s unique touch front and center,” said Arpit Dhariwal, Head of Product, Merchant Acquisition & Growth at DoorDash. “AI-powered tools are built to take everyday tasks off operators’ plates, allowing restaurants to focus on what matters most—delivering great food and service. We're excited to help drive more orders, save time, and support continued growth for our restaurant partners.”''</blockquote>As we have seen earlier higher profit margins has caught Doordash's attention. Since they also make more money from users seeing results that may resemble the food that will be ordered as a first result. However this tool can be used nefariously like how ghost kitchens used it to falsely advertise the quality and resemblance of the food being shown to the consumers of the app. It may be important to exercise caution from now on against actors that would leverage this tool against the consumer especially since there seems to be nothing in place to warn the consumer that the current item that is being viewed was generated by their AI tool. This leaves an extremely high risk that a consumer may be unsatisfied with an order because it did not match the description or the photo being listed on Doordash. | With many menus, consumers expect an accurate description of what they are ordering along with the ingredients that are being used to make it. In recent years companies have started relying on AI to generate a description and a complimentary photo of what the dish should look like. But in many cases this was done to falsely advertise to boost sales. We can look to an earlier instance during the lock down when ghost kitchens were popular;<blockquote>"Ghost kitchens are allegedly using AI-generated images on food delivery sites such as GrubHub and DoorDash. The images are used to promote online orders from kitchens that solely sell their food via online delivery services. Rather than using real photographers, they are using images of food that do not exist."<ref name=":11">{{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></blockquote>Of which many delivered products that did not match the item description at all or was poorer quality than what was shown to them within ordering. Not to mention in many countries<blockquote>"there are firm advertising laws that state exactly what you have to show and what can be substituted in food photography. This helps protect consumers, making sure they get what they order."<ref name=":11" /></blockquote>Meaning when generating a picture of food it is not considered edible by many countries standards and may even be illegal. But industries are constantly changing; custom diffusion models being packaged like Swipeby to provide cheap alternatives to make selling menu items at a higher volume.<blockquote>"The company points to a survey from Snappr, a photography and visual content platform, that found high-quality food photos can increase orders on restaurant delivery apps by 35%."<ref name=":12">{{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></blockquote>By seeing the results that such a tool can provide shows how pressing it can be for other businesses to compete if they are not also resorting to the same measures. During this time Doordash had policies about having generative photos for menu items; the founder however thinks things will change soon as he said "Give it six months, that will change,” he says. “I will bet money on it. Because with AI generation right now, it makes so much sense."<ref name=":12" /> And as of 2025 Doordash has launched it's own tool for generating AI menus on it's platform which is able to generate descriptions and pictures of an item being listed.<blockquote>''“At DoorDash, we believe AI should make life easier for restaurants—not more complicated. It’s about using automation to enhance the guest experience while keeping the operator’s unique touch front and center,” said Arpit Dhariwal, Head of Product, Merchant Acquisition & Growth at DoorDash. “AI-powered tools are built to take everyday tasks off operators’ plates, allowing restaurants to focus on what matters most—delivering great food and service. We're excited to help drive more orders, save time, and support continued growth for our restaurant partners.”''</blockquote>As we have seen earlier higher profit margins has caught Doordash's attention. Since they also make more money from users seeing results that may resemble the food that will be ordered as a first result. However this tool can be used nefariously like how ghost kitchens used it to falsely advertise the quality and resemblance of the food being shown to the consumers of the app. It may be important to exercise caution from now on against actors that would leverage this tool against the consumer especially since there seems to be nothing in place to warn the consumer that the current item that is being viewed was generated by their AI tool. This leaves an extremely high risk that a consumer may be unsatisfied with an order because it did not match the description or the photo being listed on Doordash. | ||
===Settling lawsuits due to unlawful business practices<ref name=":2" />=== | ===Settling lawsuits due to unlawful business practices<ref name=":2" />=== | ||
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A class-action litigation suit was filed for Doordash in allegedly labeling delivery workers in California and Massachusetts as independent contractors. An agreement was later reached in 2022 where Doordash payed out $100 million dollars. $61 million would be going to the effected 900,000+ drivers in both states, paying approximately $130 dollars per driver; with the other $28 million going to the lawyers.<ref name=":13">{{Cite web |last=Whitney |first=Kimball |date=2021-09-01 |title=DoorDash Settlement Would Pay a Paltry $130 to Workers Instead of Making Them Employees |url=https://gizmodo.com/doordash-settlement-would-pay-a-paltry-130-to-workers-1847586519 |url-status=live |access-date=2025-06-07 |website=Gizmodo}}</ref><ref>{{Cite web |last=Maeve |first=Allsup |date=2021-12-22 |title=DoorDash $100 Million Driver Settlement Tentatively Approved |url=https://news.bloomberglaw.com/daily-labor-report/doordash-100-million-driver-settlement-tentatively-approved |url-status=live |access-date=2025-06-07 |website=Bloomberg Law}}</ref> A quite minor sum for Doordash considering their CEO got payed $413 million dollars just the year before the settlement.<ref name=":13" /> | A class-action litigation suit was filed for Doordash in allegedly labeling delivery workers in California and Massachusetts as independent contractors. An agreement was later reached in 2022 where Doordash payed out $100 million dollars. $61 million would be going to the effected 900,000+ drivers in both states, paying approximately $130 dollars per driver; with the other $28 million going to the lawyers.<ref name=":13">{{Cite web |last=Whitney |first=Kimball |date=2021-09-01 |title=DoorDash Settlement Would Pay a Paltry $130 to Workers Instead of Making Them Employees |url=https://gizmodo.com/doordash-settlement-would-pay-a-paltry-130-to-workers-1847586519 |url-status=live |access-date=2025-06-07 |website=Gizmodo}}</ref><ref>{{Cite web |last=Maeve |first=Allsup |date=2021-12-22 |title=DoorDash $100 Million Driver Settlement Tentatively Approved |url=https://news.bloomberglaw.com/daily-labor-report/doordash-100-million-driver-settlement-tentatively-approved |url-status=live |access-date=2025-06-07 |website=Bloomberg Law}}</ref> A quite minor sum for Doordash considering their CEO got payed $413 million dollars just the year before the settlement.<ref name=":13" /> | ||
==== Data breach lawsuit (2019) ==== | |||
In early may Doordash had a data breach with over 4.9 million effected individuals. All users who registered past April 5th 2018 were safe from the data that was stolen.<ref>{{Cite web |last=Whittaker |first=Zack |date=2016-09-26 |title=DoorDash confirms data breach affected 4.9 million customers, workers and merchants |url=https://techcrunch.com/2019/09/26/doordash-data-breach/ |url-status=live |access-date=2025-05-16 |website=Tech Crunch}}</ref> This has resulted in a class action in October 2019 against Doordash for not protecting user data.<ref>{{Cite web |last=Shaak |first=Erin |date=2019-08-04 |title=DoorDash Sued Over 2019 Data Breach Affecting More Than 4.9 Million Users |url=https://www.classaction.org/news/doordash-sued-over-2019-data-breach-affecting-more-than-4-9-million-users |url-status=live |access-date=2025-06-16 |website=Class Action Org}}</ref> | |||
==== Withholding of tips and subsequent class-action lawsuits (2019) [ NEEDS CITATIONS ] ==== | |||
In July, Doordash's tipping payout to drivers was critiqued by the New York Times, The Verge and Gothamist. The pay structure in question is where the Dasher would get payed a minimum amount for each order by Doordash. If the customer added a tip it would cover the companies expenses first to cover the minimum. the remaining amount of the tip would go to the dasher that was deducted from Doordash. | |||
Later in 2020 Doordash was exposed for lying about pocketing portions of drivers tips, generating additional revenue for the company that dashers were unaware or uninformed about. This was happening after the company claimed it had refactored it's tipping system to be more transparent. But Doordash was still continuing to skim payouts for deliveries from dashers. | |||
This had led a customer to file a class action suit against the company claiming "materially false and misleading" in app tipping feature. The case was later moved to an arbitration hearing in August. Facing negative exposure and bad press the company finally complied to change their payout policy. The lawsuit was settled by District of Columbia Attorney General Karl Racine for $2.5 million with most of the amount going to dashers, government and charity. | |||
"<blockquote> | "<blockquote> | ||
===2020 antitrust litigation=== | ===2020 antitrust litigation=== | ||
In April 2020, in the case of ''Davitashvili v. GrubHub Inc.'' DoorDash, Grubhub, Postmates, and Uber Eats were accused of monopolistic power by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices be the same for dine-in customers as for customers receiving delivery. The plaintiffs stated that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge "exorbitant" fees, which range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue. The lawsuit seeks treble damages, including for overcharges, since April 14, 2016, for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps. Although several preliminary documents in the case have now been filed, a trial date has not yet been set. | In April 2020, in the case of ''Davitashvili v. GrubHub Inc.'' DoorDash, Grubhub, Postmates, and Uber Eats were accused of monopolistic power by only listing restaurants on their apps if the restaurant owners signed contracts which include clauses that require prices be the same for dine-in customers as for customers receiving delivery. The plaintiffs stated that this arrangement increases the cost for dine-in customers, as they are required to subsidize the cost of delivery; and that the apps charge "exorbitant" fees, which range from 13% to 40% of revenue, while the average restaurant's profit ranges from 3% to 9% of revenue. The lawsuit seeks treble damages, including for overcharges, since April 14, 2016, for dine-in and delivery customers in the United States at restaurants using the defendants’ delivery apps. Although several preliminary documents in the case have now been filed, a trial date has not yet been set. | ||