DoorDash, Uber Eats settle lawsuit over free delivery for Black-owned businesses

DoorDash, Uber, and Postmates in Arizona can no longer waive delivery fees charged to customers who patronize black-owned businesses after these companies reached a settlement with state authorities.

As part of various social justice/equity initiatives that many businesses adopted during and after the George Floyd-related protests, these companies had dropped the fees based on the premise that minority-owned enterprises suffered a disproportionate adverse financial impact from the effects of the COVID-19 pandemic.

Last year, the civil rights division of the Arizona attorney general’s office formally challenged the fee-waiver practice on the grounds that it violated the Arizona Civil Rights Act because it unlawfully discriminated against non-black-owned businesses.

In a statement, Republican AG Mark Brnovich reacted to the civil rights settlement.

“Even with the best of intentions, corporations can do the wrong thing. Altering the price of goods or services based on race is illegal. My office opened these investigations and pursued these settlements to protect civil rights and ensure businesses offer their services and products based on equal and neutral criteria.”

Pursuant to a written settlement with DoorDash and a separate, but similar, one with Uber Eats and Postmates, the trio of companies must abandon any consumer promotions or discounts based on race (or any other legally protected class) of the restaurant owner, including the delivery fee waiver.

Various required reporting requirements to make sure the companies follow up. The AG’s office reserves the right to investigate further in the event of non-compliance.

The settlement did not require any of the companies to admit to wrongdoing, which may have incentivized them to strike a deal to avoid further legal wrangling.

The resolution of the case applies to Arizona only. The companies can presumably continue to this kind of policy in other states, absent similar legal challenges.

In a response to the settlement, DoorDash insisted that it acted appropriately, Fox Business reported.

“The ongoing health and economic crisis disproportionately devastated communities of color and highlighted disparities in opportunity for vulnerable populations…While we adamantly deny any wrongdoing, particularly when government programs have offered the exact support DoorDash has provided, we’re ready to put this dispute behind us and return our focus to enabling equitable access to the merchants, Dashers, and customers we serve. We all have an obligation to elevate and support underrepresented communities, and we look forward to continuing to do so in Arizona and beyond.”

According to Uber, “We’re proud to have supported Black-owned businesses and we’ll continue to make it a priority. We have heard loud and clear from consumers that the ability to easily identify Black-owned restaurants on Uber Eats is a feature they want and appreciate.”

So far, Postmates has not released a statement about the Arizona settlement.

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