DoorDash is fighting for its right to charge you $25 to have a $12 burger delivered to your door.
What happened: DoorDash is asking Canada’s Competition Tribunal to toss out a Competition Bureau lawsuit that accused the food delivery app of misleading customers with “drip pricing,” the increasingly common practice of advertising one price before piling on mandatory fees at checkout.
- In its filing, DoorDash claimed it clearly discloses fees and that its users are “tech savvy” enough to understand how the pricing works.
- The bureau alleges DoorDash has been using drip pricing for nearly a decade, raking in close to $1 billion in extra charges through service, delivery, and small order fees.
Catch-up: Canada’s consumer watchdog is going after companies that have made last-second fees a core part of their business. Last year, the bureau’s investigations into misleading prices led to a $39 million fine for Cineplex and a $3.3 million settlement with SiriusXM.
- Last month, the watchdog added DoorDash to that list. Among other remedies, the bureau wants the food delivery platform to pay restitution to affected customers.
Why it matters: If DoorDash gets the case dismissed, it could set a precedent that drip pricing is just the cost of doing business in the digital economy. That would leave Canadians with little protection from the hidden fees that have become central to buying everything from airfare to movie tickets to late-night food orders.—LA
An earlier version of this story carried the headline “DoorDash defends drip pricing.” DoorDash has stated “To be crystal clear, DoorDash does not hide fees from consumers or mislead them in any way” and denies that it engages in drip pricing.