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Vancouver Sun
13-06-2025
- Business
- Vancouver Sun
Delivery services under legal scrutiny for alleged 'drip pricing'
The practice known as 'drip pricing' is front and centre again in an action by the federal Competition Bureau against DoorDash and in a proposed class-action lawsuit brought by a Toronto law firm against Uber Eats. Drip pricing generally involves enticing customers by advertising low prices, but charging extra mandatory fees, usually when they are checking out. It continues to come under fire because 'disclosure around pricing and fees in various consumer transactions is, at times, less than thorough and transparent,' says Mike Robb, partner with London, Ontario-based law firm, Siskinds. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. The Competition Bureau says w hen 'the represented price is inaccurate, it makes it more difficult for consumers to comparison shop and result(s) in unfair outcomes for honest competitors.' Canada's competition watchdog is hauling DoorDash Inc. and its Canadian subsidiary before the Competition Tribunal, accusing them of portraying the online cost of delivery as lower than the price consumers ultimately pay. The Competition Bureau says it investigated and is alleging DoorDash customers paid more, due to mandatory fees, added during checkout. The extra fees, the bureau says, include charges such as extra amounts for delivering items a further distance and for placing smaller orders. The bureau alleges the discretionary charges were sometimes framed as taxes. The bureau alleges DoorDash may have used drip pricing for close to a decade to make nearly $1 billion from mandatory fees, according to the Canadian Press . The bureau is asking the Competition Tribunal to order the company to stop the practice, cease portraying fees as taxes, pay a penalty and issue restitution to affected consumers. However, DoorDash is pushing back. 'This application is a misguided and excessive attempt to target one of Canada's leading local commerce platforms,' DoorDash spokesperson Trent Hodson told CP . 'It unfairly singles out DoorDash, and we intend to vigorously defend ourselves against these claims.' Still, the bureau is standing its ground. 'Our litigation against DoorDash is another example of our efforts to ensure consumers are not misled and can trust the prices they see online. We urge all businesses to review their pricing practices and make sure they comply with the law,' said Matthew Boswell, commissioner of competition in a press release . The Competition Bureau has been more aggressive of late in battling drip pricing. Last fall, the bureau won a deceptive marketing case against Cineplex Inc. , noted Robb. It had been adding a mandatory $1.50 online booking fee. The company was ordered to pay a financial penalty of almost $39 million. Last summer, says Robb, the bureau reached an agreement with SiriusXM Canada . In that case, the company was ordered to pay a $3.3 million penalty over adding a fee on subscription plans that increased the monthly cost. Meanwhile, legal action against drip pricing is not exclusive to public regulators. Law firms that navigate class actions are getting in on the act too. Toronto firm, Koskie Minsky filed a statement of claim against Uber Eats with the Ontario Superior Court Justice last month. It alleges Uber Eats has been hiding an additional service fee within its overall delivery costs. The proposed class action alleges that Uber misrepresented the true cost of delivery by not disclosing the service fee until the final stage of the transaction, 'often obscured under a 'Taxes & Other Fees' line item, a practice known as drip pricing,' says the law firm on its website. The action has been brought on behalf of Canadian residents who on or after May 16, 2023, placed a delivery order using Uber Eats and paid a service fee. Further, the lawsuit alleges Uber One members, who are supposed to enjoy benefits such as no delivery fees on eligible orders, have been paying the service fee. It's 'really a delivery fee as it only applies to delivery orders' and it 'constitutes a breach of contract and negates the advertised benefit of the subscription.' Robb says 'the existence of parallel proceedings in these cases is not necessarily surprising or unusual.' He explains that the Competition Bureau has a statutory mandate to protect Canadian consumers and businesses from allegedly unfair business practices. In its case against DoorDash , it is asking the Competition Tribunal to provide restitution to consumers, though that's somewhat unusual, he says. 'It may or may not be equipped to negotiate and deliver remedies to consumers.' However, he points out that class actions always focus on recovery for consumers, 'even when the amounts are individually minimal. It is common in our cases that when they resolve, an administration mechanism is established to facilitate an accessible distribution of modest amount to individual consumers.' A recent example would be a payout website established for the bread-fixing class-action settlement. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
Globe and Mail
09-06-2025
- Business
- Globe and Mail
Competition Bureau sues DoorDash, alleging misleading price promotions
The Competition Bureau is taking legal action against DoorDash Inc. DASH-Q and its Canadian subsidiary, alleging the company promotes their online delivery services at a lower price than what consumers actually have to pay. The bureau said Monday that it had launched an investigation, finding that consumers could not purchase food and other items at the advertised price on DoorDash websites and apps owing to additional mandatory fees at checkout. This practice is what the bureau refers to as drip pricing and 'is deceptive because consumers are not presented with an attainable price upfront,' it said in a news release. The bureau alleges that certain fees presented on DoorDash platforms appear to be taxes, but are instead charges imposed at the company's discretion. The bureau filed its application against DoorDash with the Competition Tribunal, calling for the company to pay a penalty, end deceptive price and discount advertising, stop portraying fees as taxes, and issue a restitution to affected consumers who purchased items through DoorDash's platform. Trent Hodson, communications lead for DoorDash Canada, told The Globe and Mail in an e-mailed statement that transparency is a 'top priority' for the company and denied the allegations of misleading customers. The bureau's statement notes that DoorDash charges consumers numerous mandatory fees to deliver orders made online, including service fees, delivery fees, expanded range fees, small order fees and regulatory response fees. Opinion: Canada needs a wartime competition policy DoorDash has engaged in the alleged conduct of drip pricing for close to a decade, acquiring nearly $1-billion in mandatory fees from customers, according to the bureau. In one case, the bureau said, a customer in Quebec tried to order an item from a sushi shop through DoorDash that was originally advertised as $6.25, but could not purchase the item without paying the obligatory fees, including a $1.99 delivery fee and service fee ranging from $1.99 to $3.99. These charges appear to be in addition to tax fees. Throughout the order process, these types of fees are often hidden or are not in close proximity to the initially stated prices. The bureau uses this example to establish their argument that DoorDash omits or hides obligatory fees from the price representation until checkout, rendering the advertised price of $6.25 unattainable. 'The Competition Bureau has been fighting against this misleading practice for years,' Commissioner Matthew Boswell said in the release. 'Our litigation against DoorDash is another example of our efforts to ensure consumers are not misled and can trust the prices they see online.' Mr. Hodson of DoorDash Canada said in his statement that 'All fees on DoorDash, which support the high-quality operations of our platform, are clearly labeled and disclosed to consumers throughout the ordering process – including a final review before payment. 'To be crystal clear, DoorDash does not hide fees from consumers or mislead them in any way. [The Competition Bureau's] application is a misguided and excessive attempt to target one of Canada's leading local commerce platforms. It unfairly singles out DoorDash, and we intend to vigorously defend ourselves against these claims.' This is not the first time the bureau has sought legal action against a company alleging misleading prices. Last September, the bureau won a deceptive marketing case against Cineplex Inc. for engaging in drip pricing by adding a mandatory $1.50 online booking fee and ordered the company to pay a financial penalty of more than $38.9-million. Last June, the bureau reached an agreement with SiriusXM Canada to address concerns over a mandatory additional fee on subscription plans that increased the monthly cost by 10 to 20 per cent. Currently, the bureau is pursuing legal action against Canada's Wonderland for alleged false or misleading price claims.
Vancouver Sun
09-06-2025
- Business
- Vancouver Sun
Competition Bureau sues DoorDash for allegedly misleading customers over fees
Canada's competition watchdog is suing DoorDash Inc. and its Canadian subsidiary, accusing it of marketing its online delivery services at a lower price than what consumers actually wind up paying. The Competition Bureau alleged Monday that an investigation found DoorDash customers were unable to purchase food and other items at prices advertised on the food delivery company's websites and mobile apps because of mandatory fees added at checkout. The extra charges range from service and delivery fees to amounts sought for couriering things a further distance, placing smaller orders or making purchases in B.C., where DoorDash has to comply with minimum wage regulations for gig workers. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. The bureau alleged the charges were sometimes framed as if they were taxes, when in reality, they are charges imposed at DoorDash's discretion. The fees resulted in customers paying higher prices than advertised and amounted to a deceptive practice known as drip pricing, which the bureau alleges DoorDash may have used for close to a decade to make nearly from $1 billion from mandatory fees. The bureau wants the company to stop the practice, cease portraying fees as taxes, pay a penalty and issue restitution to affected consumers. DoorDash is pushing back on the requests, saying 'it does not hide fees from consumers or mislead them in any way.' 'This application is a misguided and excessive attempt to target one of Canada's leading local commerce platforms,' DoorDash spokesperson Trent Hodson said in a statement to The Canadian Press. 'It unfairly singles out DoorDash, and we intend to vigorously defend ourselves against these claims.' The Competition Bureau has been more aggressive in its fight against drip pricing since the Competition Act was amended in June 2022 to more clearly distinguish the practice as harmful, giving regulators more room to pursue companies who engage in such activity. The bureau accused Cineplex Inc. of drip pricing in May 2023, eventually winning a $38.9-million fine against the movie theatre giant, which is contesting the decision from the Competition Tribunal. Other recent Competition Bureau targets for drip pricing have included SiriusXM Canada, Discount Car & Truck Rentals Ltd. and TicketNetwork. Its Door Dash court filing shows it is going after the business for making 'false or misleading representations' because 'when consumers go online to order, they expect these services to deliver not just food, but also honest pricing.' 'Consumers expect that the price they see advertised will match what they ultimately pay,' the bureau's application said. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
Edmonton Journal
09-06-2025
- Business
- Edmonton Journal
Competition Bureau sues DoorDash for allegedly misleading customers over fees
Article content 'This application is a misguided and excessive attempt to target one of Canada's leading local commerce platforms,' DoorDash spokesperson Trent Hodson said in a statement to The Canadian Press. 'It unfairly singles out DoorDash, and we intend to vigorously defend ourselves against these claims.' The Competition Bureau has been more aggressive in its fight against drip pricing since the Competition Act was amended in June 2022 to more clearly distinguish the practice as harmful, giving regulators more room to pursue companies who engage in such activity. The bureau accused Cineplex Inc. of drip pricing in May 2023, eventually winning a $38.9-million fine against the movie theatre giant, which is contesting the decision from the Competition Tribunal. Other recent Competition Bureau targets for drip pricing have included SiriusXM Canada, Discount Car & Truck Rentals Ltd. and TicketNetwork. Its Door Dash court filing shows it is going after the business for making 'false or misleading representations' because 'when consumers go online to order, they expect these services to deliver not just food, but also honest pricing.' 'Consumers expect that the price they see advertised will match what they ultimately pay,' the bureau's application said.
