DoorDash Class Action Lawsuit Says App Steers Users Away From Non-Partner Restaurants

A St. Louis restaurant has filed a class action lawsuit alleging the DoorDash app for food delivery steers customers away from restaurants that are not a DoorDash partner.

Lona’s Lil Eats LLC claims the DoorDash app “deceptively” steers customers away from certain restaurants, saying they are closed, cannot deliver to the customer or are not accepting orders. This often results in the customer ordering instead from a DoorDash partner that has paid the company’s fees. 

The DoorDash app class action lawsuit was filed in federal court in California, where the company is based, and accuses the company of false advertising and violations of California’s Unfair Competition Law.

DoorDash maintains relationships with partner restaurants by taking orders online or through the DoorDash app and relaying those orders to the restaurants, the class action lawsuit says. DoorDash collects payments for these orders, and the partner restaurants have “various commissions and related fees held back from the funds collected from orders in payment to DoorDash.”

The plaintiff maintains that the COVID-19 pandemic has led to the development of “significant market power” for DoorDash, because many restaurants are not or were not offering dine-in services.

“The market power is such that restaurants are put in a difficult situation: they can become Partner Restaurants and pay exorbitant fees and commissions to Defendant, or they decline to do so and risk losing out on sales.”

Making that decision is even more complicated thanks to allegedly false and misleading information published by the company about non-DoorDash partner restaurants.

Lona’s Lil Eats claims that if a consumer searches for “Lona’s Lil Eats delivery,” one of the top results is a link to the restaurant on a DoorDash landing page. Clicking the link takes potential customers to a DoorDash-branded page that has the full Lona’s menu, “as if it were possible to place an order through the site.”

The plaintiff says the site allows customers to go through the whole ordering process, “adding credibility to the idea that Lona’s has partnered with DoorDash.”

However, the class action lawsuit states, the order is unable to be completed because no matter how close the person ordering is to Lona’s, the DoorDash app or site says the restaurant “is ‘unavailable’ on account of being ‘out of the delivery area’ and ‘too far.’”

But the real problem is that Lona’s hasn’t agreed to pay the “exorbitant fees” required to become a DoorDash partner, the plaintiff says.

“A consumer can change his or her address over and over again, but it will never become available for delivery because Lona’s is not a Partner Restaurant.” 

The class action lawsuit says in the past, DoorDash would tell potential customers searching for Lona’s that the restaurant was closed, taking advantage of market demand for Lona’s — and other restaurants — by then steering those customers to DoorDash partner restaurants. Lona’s provides curbside service, and therefore is available to customers.

The complaint calls DoorDash’s conduct “troubling,” particularly in light of the ongoing pandemic.

“At a time when many restaurants — and in particular locally owned restaurants (as opposed to national chains) — are struggling to stay open and have been forced to radically change their business model to survive, DoorDash is engaged in predatory, deceptive, and anticompetitive behavior that takes unfair advantage of their market position.”

The Class has the potential to be quite large.

The proposed Class consists of “all restaurants, entities, and/or individuals with any ownership interest in such restaurants or entities, in the United States who do not do business” with DoorDash but have a landing page on the DoorDash app or website.

Lona’s Lil Eats seeks a jury trial, as well as an award of declaratory relief finding the alleged deceptive business practices unlawful; appropriate equitable relief; an award of restitution, disgorgement and actual, statutory exemplary and punitive damages; compensatory damages for economic loss; pre- and post-judgment interest; attorneys’ fees and court costs; and other relief.

Have you ordered through the DoorDash app? Did you notice it told you some restaurants were too far away? Tell us about your experience in the comments.

The plaintiff is represented by Francis J. “Casey” Flynn Jr. of the Law Office of Francis J. Flynn Jr.; James J. Rosemergy of Carey, Danis & Lowe; and Steven A. Schwartz, Zachary P. Beatty, Chimicles Schwartz Kriner & Donaldson-Smith LLP.

The DoorDash App False Advertising Class Action Lawsuit is Lona’s Lil Eats LLC, et al. v. DoorDash Inc., Case No. 3:20-cv-06703-TSH, in the U.S. District Court for the Northern District of California, San Francisco Division.

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