Uber Eats users in Washington, DC, and Pennsylvania will now see a pop-up message on the app's checkout page saying that the total cost of the food they are about to order may be more expensive compare to ordering in restaurants.
The Uber Eats app will also display a "Prices may be lower in store" disclosure after two attorneys general pushed for the company to be more transparent to its customers about prices.
Uber Eats Price Transparency
According to Uber, the Uber Eats app already has pricing disclosures. However, Attorney General Josh Shapiro from Pennsylvania and Attorney General Karl Racine from Washington, DC, said that the company's disclosure is not enough and want them to be more transparent.
Attorney General Racine said in a statement posted on Attorney General Josh Shapiro's webpage that companies such as Uber Eats must be transparent about their pricing and the fact that getting food directly from a restaurant is often cheaper than having it delivered through a third-party app.
Attorney General Racine added that this change in rules is important, especially now that more and more consumers are using apps like Uber Eats.
They strongly encourage other delivery apps to follow the footsteps of Uber Eats and warned those that do not take the change seriously would be investigated.
The attorneys general concluded that consumers deserve clear information to make better decisions that work best for them.
Meanwhile, Uber released a statement to Bloomberg stating that the company and its partners set their own prices on Uber Eats.
A spokesperson for Uber said they believe it is important to give this type of flexibility to their merchant partners, especially during the recovery of the food industry hit by the pandemic last year.
Food delivery platforms such as Uber Eats, Grubhub, and DoorDash require customers to pay extra service fees. The platforms then charge restaurants a 30% commission.
Since the pandemic, restaurants are struggling to operate, with some having no choice but to increase the price of their menu items on the food delivery apps just to offset the cost of commissions.
Food Delivery Expenses
According to BBC, a food delivery costs 23% more on an app than ordering directly from a restaurant. Restaurants set the prices on food delivery apps, and they usually increase the price to cover the service fees charged.
Using food delivery platforms helped the restaurants keep their business going since most of them were forced to shut down their physical stores due to the pandemic, which did not allow them to dine.
Uber Eats responded to this price hike by saying that they are focused on ensuring that the best restaurants and the best food selection are available to their customers wherever they are. Whatever time of day it may be.
The attorney general understands that there are price differences between ordering straight from the restaurant and using a delivery app. The only solution that they can present for now is to be upfront with the customers regarding the prices.
Currently, only two states have ordered Uber Eats to make changes in the app, and it is still not clear if other states will follow.
This article is owned by Tech Times
Written by Sophie Webster