Luján, Warren, Casey Slam DoorDash and UberEats for Hidden Junk Fees, Demand Information About Fees and Ties to Executive Compensation

Text of Letter to DoorDash (PDF)|Text of Letter to UberEats (PDF)

Washington, D.C. - United States Senators Ben Ray Luján (D-N.M.), Elizabeth Warren (D-Mass.), and Bob Casey (D-Penn.) wrote to DoorDash and UberEats, the two largest delivery platforms, calling out their use of hidden junk fees to take advantage of American consumers trying to put food on the table while balancing busy schedules. UberEats and DoorDash have taken advantage of consumers, who are relying more and more on delivery services to put food on the table while balancing difficult work schedules, caring for young children or elderly parents, and other obstacles, creating an opportunity for these delivery platforms to tack on confusing and unexplained fees, which can triple order prices in some cases.

American families are struggling with high food prices, and research shows that in many cases, corporate actions such as price gouging and shrinkflation are to blame. Big food companies used the supply chain shocks of the pandemic and recent inflation as a cover for raising their prices far higher than their increase in production costs. In recent years, consumers spent more than 11 percent of their disposable income on food.

Restaurants and stores often increase their listed prices to offset the huge fees that delivery platforms charge them for using their service, which can sometimes go up to 30 percent. Delivery platforms then add extra fees for delivery and other services to the existing markup. Fees can vary depending on location, distance, the number of items ordered, the amount of available delivery drivers, and general demand in the order area. While these fees can start off as small dollar amounts and percentages of an order subtotal, they quickly add up and the total markup on a food delivery order (before tip) can be as high as 95 percent. Worse, customers often cannot see the fees until just before paying, meaning a large portion of the total cost of ordering is hidden from customers until there is only one button left to press.

Platforms often provide insufficient explanations for where their service and delivery fees go, and the fees can sometimes cost more than the order itself.

While these companies continue to squeeze customers with hidden fees, they continue to line the pockets of executives and shareholders. Instead of reinvesting revenue in delivery workers' compensation or cutting down frivolous fees for consumers, both companies announced stock buybacks this year. In February 2024, DoorDash announced a $1.1 billion round of stock buybacks. In March 2024, UberEats initiated a $7 billion stock buyback. In 2020, DoorDash went public and had the highest-paid CEO in Silicon Valley, with a total compensation of nearly $413 million. Last year, Uber posted a full-year profit for the first time since going public in 2019 and paid its CEO more than $24 million.

Notably, this is not the first congressional investigation into DoorDash's and UberEats' fee structure. Senator Luján wrote to both companies last year about their high consumer fees and lack of transparency. The delivery companies' responses offer little clarity on customer fee structure.

The lawmakers are requesting information about every type of fee or service charge the delivery platforms currently charge and their tie to executive compensation by May 15, 2024.