DoorDash Faces $1 Billion Lawsuit for Alleged Discriminatory Pricing Towards iPhone Users

In a recent development, the popular food delivery app DoorDash has been embroiled in a high-stakes legal battle, facing a $1 billion class-action lawsuit. The lawsuit, filed in the US District Court of Maryland on May 5, accuses DoorDash of implementing discriminatory pricing practices that unfairly target iPhone users. The plaintiffs argue that the company systematically imposes higher fees on iOS users than their Android counterparts, supposedly based on the premise that iPhone users tend to have higher incomes.

The explosive lawsuit alleges that DoorDash engages in deceptive, misleading, and fraudulent practices, particularly about imposing “illegal” fees on customers using Apple’s iOS devices. The suit claims that these fees, referred to as “expanded range” charges, are arbitrarily added to orders made by iPhone users, even if the orders are identical to those placed on Android devices. The lawsuit further contends that DoorDash’s decision to impose higher fees on iPhone users is primarily motivated by studies indicating that iPhone users generally earn more money.

Ross Hecox, a single father of two, a DoorDash customer subscribing to the DashPass service, is the primary plaintiff in the class-action suit. DashPass subscribers, like Hecox, pay a subscription fee to avail themselves of exclusive discounts, making the alleged discriminatory fees even more concerning. Hecox asserts that these pricing tactics are blatant money grabs by DoorDash, exploiting unsuspecting customers.

Controversy Surrounding Expanded Range Fee and Lack of Transparency of DoorDash

The lawsuit also claims that DoorDash intentionally directs orders from iPhone users to restaurants farther away, potentially triggering the expanded range fee and justifying increased delivery costs. According to the plaintiffs, DoorDash’s definitions of “normal delivery areas” and associated fees are deliberately unclear, leading to further customer confusion and frustration.

DoorDash, with its substantial user base of over 27 million customers, has vehemently denied the allegations made in the lawsuit. A company spokesperson emphasized that DoorDash does not differentiate its fees based on the type of phone used, categorically rejecting the notion that iPhone and Android users are charged differently. The spokesperson further stated that the claims made in the lawsuit are false, and the company intends to defend itself against the allegations vigorously.

DoorDash Faces $1 Billion Lawsuit for Alleged Discriminatory Pricing Towards iPhone Users
Credits: Business Insider

One of the central points of contention revolves around DoorDash’s expanded range fee, which is vaguely described as a fee that helps the company maintain access to restaurants farther away. However, the lawsuit argues that this fee is not determined by geography but by how much a restaurant pays DoorDash. The lack of transparency regarding these fees and the company’s practices has exacerbated the dispute.

Detailed Examples Highlighting Discrepancies in Charges Between iPhone and Android Users

The complaint provides detailed examples, including screenshots, illustrating the alleged disparity in charges between iPhone and Android users throughout the ordering process. These examples were also highlighted by popular TikToker “Lawyer Angela,” who carefully examined the discrepancies in charges. In one instance, two identical Chick-fil-A orders placed at the same time from the exact location resulted in a $1 difference in the delivery fee, with the iPhone user being charged more. DoorDash’s spokesperson, however, maintained that the difference in delivery fee pricing was unrelated to the choice of device used for placing the order.

Another example featured screenshots of DoorDash orders for a Chipotle chicken burrito bowl, revealing a $1.99 difference in the delivery fee between iPhone and Android users. Again, DoorDash’s spokesperson refuted any suggestion that the pricing disparity was linked to the type of device.

DoorDash must confront severe allegations of discriminatory practices and misleading pricing strategies as this lawsuit unfolds. The case outcome will likely have significant implications for the company and its relationship with iPhone users and potential ramifications for the broader food delivery industry.