DoorDash allegedly admitted it charged a New York City restaurant nearly $14,000 in bogus delivery fees — but only offered to repay the burger joint half the amount in a settlement, according to a lawsuit.
Harlem Shake — a 12-year-old eatery at 100 W. 124th St. whose customers have included NBA legend Shaquille O’Neal and rapper Jim Jones — has paid $13,932 in phony commissions since November 2019, according to the complaint filed this month in federal court in the Northern District of California.
When the eatery confronted DoorDash with the evidence, which it first discovered in June, the San Francisco-based company admitted it had “improperly” taken $13,932 in commissions, but only offered to repay the eatery $7,259, according to the complaint.
DoorDash likewise “insisted that Harlem Shake execute a release and settlement of any and all claims related to DoorDash’s “miscalculated fees,”’ the lawsuit claims.
The lawsuit is seeking class action status, alleging that the tech company’s overbilling practice is “widespread and pervasive,” affecting “thousands” of restaurants and violates a 2020 law in New York that limits delivery apps fees in New York City to 20% of a take-out order.
“To date, DoorDash has failed to provide any full accounting, but has admitted that it charged fees in excess of the fee cap,” the complaint alleges.
The lawsuit didn’t lay out further details on the allegedly fraudulent fees.
Harlem Shake declined to comment “this early in the legal proceedings,” a spokeswoman said in an email.
A spokesperson for DoorDash said in a statement, “If there’s ever an inadvertent error, we work with the merchant to fix it and refund any amounts owed. We stand by our commitment to New York City restaurants and hope to quickly resolve this matter.”
Harlem Shake’s counsel, which includes lawyers based in California, Tennessee and Mississippi, did not return calls and emails seeking comment.
DoorDash is not the only delivery app being accused of unsavory business practices.
The district attorney of Los Angeles county sued Grubhub on Feb. 21 alleging that “Multiple aspects of Grubhub’s business — and every transaction for food delivery — are suffused with deception,” according to the complaint.
The allegations include false advertising, bait-and-switch delivery pricing and misrepresentations about driver benefits and tips, according to the filing.
In a statement to The Post Grubhub said, “We work hard to support Los Angeles restaurants, diners and drivers, and we continually review and enhance our operations to better serve them and meet their expectations. We’ve sought to engage in a constructive dialogue with the Los Angeles County Counsel’s office to explain our business and identify any areas for improvement. We are disappointed they have moved forward with this lawsuit because our practices have always complied with applicable law, and in any event, many of the allegations are incorrect or have been discontinued. We will aggressively defend our business in court and look forward to continuing to serve LA restaurants, diners and drivers.”
The New York City delivery fee cap was imposed shortly after the pandemic began to help restaurants that had been slammed by COVID restrictions and who previously had been paying commissions as high as 30%.
The city council passed legislation that caps food delivery fees at 15% of an order plus an additional 5% for marketing and credit card processing charges.
Other cities and states implemented similar rules, which are largely still in place.
The delivery apps, including UberEats and Grubhub, sued New York City to overturn the cap, arguing that it would hurt restaurants because they would not get the same level of services and exposure, which would result in fewer customer orders.
That litigation is ongoing.
Massachusetts sued Grubhub in 2021, alleging the delivery app company had violated the state’s 15% fee cap law.
Chicago sued Grubhub and Doordash over consumer fees, alleging that they were deceptive.
“My understanding is that the food delivery platforms violated COVID ordinances and caps fairly often,” said a legal expert who did not want to be identified.
“The billion-dollar delivery companies have a long history exploiting restaurants and that’s why they were regulated here in NYC,” Andrew Rigie, executive director of the New York City Hospitality Alliance, told the Post.
“From charging fake fees for orders never made to listing restaurants without permission, they have been caught time after time,” Rigie added.
This story originally appeared on NYPost
