WASHINGTON, D.C.— Attorney General Karl A. Racine and Pennsylvania Attorney General Josh Shapiro today announced they successfully collaborated with online food delivery platform Uber Eats to secure better disclosures about the price discrepancy between in-app purchases and orders placed directly with restaurants.
“Food delivery apps provide convenience, safety, and ease for so many consumers – especially during the pandemic,” said AG Racine. “As more and more consumers use apps like Uber Eats, it’s critical that these companies are transparent about their pricing and the fact that getting food directly from a restaurant is often cheaper. We appreciate Uber Eats immediately addressing our concerns. Going forward, Uber Eats’ delivery app will make clear that its prices may be more expensive than those charged by the restaurants themselves. We strongly encourage other delivery apps to follow in Uber Eats’ footsteps. Those that do not risk investigation and scrutiny by our offices. Consumers deserve clear information so they can make informed decisions that work best for them.”
“Online food delivery platforms can be very convenient, but hidden fees have driven up costs for consumers and hurt struggling neighborhood restaurants at the worst time. You deserve to know where your money is going and I’m pleased that by working together Uber Eats made their pricing more transparent,” said AG Shapiro. “This is another step towards making the marketplace more fair for restaurants and consumers — and I call on all food-delivery platform companies to provide this same information as soon as possible.”
At the request of AGs Racine and Shapiro, Uber Eats made new disclosures on its app that prices on the platform may be higher than in the restaurant. That disclosure is now included at the stage of the ordering process when consumers are reviewing the subtotal, tax, delivery fee, and total cost of their order, right before the consumer agrees to place the order.
In addition, the attorneys general want consumers to be aware that:
- Items are often more expensive in the app: When you place an order for groceries or order food from a restaurant through a delivery app, the price you are charged for each item may be higher than it would be if you bought the item in the store or restaurant. The higher item prices are charged in addition to the delivery app fees, discussed below.
- Fees are charged by delivery apps: Consumers should be aware of fees and charges related to any orders made on a delivery app, in addition to any applicable taxes. Fees will generally always include service fees, delivery charges, and any tip that the consumer allocates for the delivery driver. Other fees that may be charged include: a “heavy” fee if the order includes heavy items, a “small order” fee for orders below a minimum subtotal, and “surge” fees when there is high customer demand. Consumers can find more information by checking the terms and conditions of the platform’s service.
- Restaurants pay commissions to the delivery apps: Restaurants pay a percentage of each order in commission to the delivery apps, in addition to the fees that customers pay to the delivery apps. Consumers who want all of their payment to be paid to the restaurant can order and pick up directly from the restaurant.
AG Racine separately sued food delivery service DoorDash in 2019 for its practice of misleading and encouraging consumers to tip for food deliveries, and then pocketing those tips instead of passing them along to workers. In its lawsuit, OAG alleged that DoorDash led consumers to believe that any tips would go directly to food delivery workers, while instead effectively treating this money as extra profit for the company. OAG recovered $1.5 million in restitution that was returned to DoorDash drivers to replace tips the company pocketed for itself.