DC Attorney General Karl Racine and Pennsylvania Attorney General Josh Shapiro worked together and managed to have UberEats disclose more details about the price discrepancy between in-app purchases and direct orders from restaurants on its mobile app.
The news was announced by Racine and Shapiro through press releases on Tuesday.
“Food delivery apps provide convenience, safety, and ease for so many consumers – especially during the pandemic,” Racine said in his statement. “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 UberEats immediately addressing our concerns.”
The online food delivery platform will explicitly display when its prices may be more expensive than those charged by the restaurants themselves, according to Racine, who called on every other similar company to follow suit.
Under the agreement the two attorneys general have reached with UberEats, users will be able to view the price differences right before placing the order, when they are reviewing the subtotal, tax, delivery fee, and total cost of their order.
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.
— AG Karl A. Racine (@AGKarlRacine) June 23, 2021
“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,” Shapiro said in his release. “You deserve to know where your money is going and I’m pleased that by working together Uber Eats made their pricing more transparent. 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.”
In a joint call, Racine and Shapiro also ask 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.