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Seattle resident lodges FTC complaint accusing Uber and DoorDash of deceiving customers with hidden fees

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In Seattle, DoorDash and Uber have added a $4.99 “SEA Regulatory Response Fee” to customer orders to cover increased operating costs due to new minimum wage standards. A complaint filed with the Federal Trade Commission alleges that these fees are deceptive and misleading, not related to actual costs, and that the companies mislead consumers about the total cost of delivery. Both companies have defended the fees as necessary to offset the increased costs imposed by regulations.

The complaint, filed by a Seattle resident, Robert White, points out that the $5 fee is consistent for all orders and does not reflect the distance of the restaurant from the customer or the time spent by the driver, which is how the minimum wage is calculated. The complaint argues that these “junk fees” mislead consumers and manipulate the marketplace, leading to increased costs for all deliveries. The Federal Trade Commission proposed a rule to ban such fees as they can harm consumers and honest businesses.

Both companies insist that the fees are clearly disclosed and necessary to comply with Seattle City Council’s new legislation. DoorDash and Uber argue that the fees are required to cover the costs associated with the law and allowing them to continue operating in the city. Despite the complaint’s allegations, the Federal Trade Commission has declined to comment on the issue.

While some drivers in Seattle are benefiting from the new minimum wage law, others are experiencing reduced income due to declining demand caused by the added fees. The new ordinance would bring the minimum pay rate for delivery drivers to $19.97, down from $26.40, aligning with the city’s minimum wage for employed workers. The impact of labor standards on driver pay is being closely monitored in Seattle and New York City, where similar laws have been implemented recently.

Seattle’s minimum wage legislation, passed in 2022, is one of several “PayUp” laws approved in the city. These laws aim to protect workers in the growing food delivery market, where tech companies like DoorDash and Uber Eats operate. Seattle has also passed other laws related to worker deactivation processes and funding for the enforcement of labor standards. The city has become a testing ground for the impact of labor standards in the food delivery industry, highlighting the challenges faced by workers and companies alike.

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