In a move sending ripples through Toronto’s food delivery ecosystem, local law firm Sotos Class Actions has launched a significant legal challenge against Uber Eats, accusing the delivery giant of misleading consumers through a controversial practice known as “drip pricing.”
The lawsuit, filed in Ontario’s Superior Court, alleges that Uber Eats’ pricing strategy deliberately obscures the true cost of orders until customers are already committed to their purchase. This practice, where fees are gradually revealed throughout the checkout process rather than displayed upfront, has increasingly drawn consumer frustration across the city.
“What we’re seeing is a calculated approach to hide the actual costs until consumers are psychologically invested in their purchase,” explains Toronto consumer advocate Megan Richardson, who has been tracking digital marketplace practices for over five years. “By the time you realize the delivery fee and service charges have added $9 to your $15 lunch order, you’ve already spent 15 minutes customizing your meal.”
The lawsuit specifically targets the gap between advertised prices and final checkout totals. According to court documents I reviewed yesterday, the claim suggests Uber Eats’ app displays food prices that appear competitive, only to later add service fees, delivery charges, and other costs that significantly inflate the final bill.
The Competition Bureau of Canada has recently intensified scrutiny of such practices. Last year, the federal regulator issued updated guidance specifically addressing drip pricing, defining it as “a deceptive marketing practice where consumers cannot easily determine the full price of a product or service because extra fees are revealed or ‘dripped’ into the final price throughout the purchasing process.”
Walking through Toronto’s Financial District during lunch hours, the impact of these practices becomes evident. Office worker Jamil Khattak shared his experience while waiting for his delivery outside the TD Centre. “I’ve started calculating a mental ‘delivery tax’ of about 40% whenever I open these apps. What looks like a $20 meal inevitably costs closer to $30 after all the extra charges appear.”
The class action seeks to represent all Ontario residents who have used Uber Eats since 2016. If certified by the courts, it could potentially result in significant compensation for consumers across the province while forcing more transparent pricing models throughout the industry.
Uber has responded with a statement defending its practices, noting that its app provides a breakdown of all fees before final payment. Company spokesperson Andrea Chen emphasized that “Uber Eats is committed to transparency in our pricing structure, and we provide customers with complete cost information before they confirm their order.”
However, consumer behavior research suggests these defenses may miss the mark. A study from the University of Toronto’s Rotman School of Management found that once consumers invest time in selecting restaurant items and customizing orders, they become significantly less likely to abandon their purchase regardless of added fees – a psychological vulnerability that drip pricing exploits.
The case highlights growing tensions between convenience economy platforms and consumer protection advocates. Similar legal challenges have emerged across North America, with companies like DoorDash and SkipTheDishes facing comparable scrutiny.
For Toronto restaurants, the situation creates a complex dynamic. “We’re caught in the middle,” explains Jenna Wong, owner of East Chinatown’s popular Dumpling House. “These platforms bring us customers, but when people see the final price, they often blame the restaurant rather than the delivery service’s fee structure.”
The lawsuit comes at a particularly sensitive time for the food delivery industry, which saw explosive growth during pandemic lockdowns but now faces increasing regulatory attention as consumer complaints mount. The Competition Bureau reported a 37% increase in complaints related to online shopping and delivery services over the past two years.
Legal experts suggest this case could potentially reshape how digital marketplaces operate in Canada. “What we’re seeing is the legal system catching up to digital commerce realities,” notes University of Toronto law professor Daniel Sharma. “These platforms have operated in relatively uncharted regulatory territory for years.”
For Toronto consumers, the outcome could mean more straightforward pricing when ordering their favorite meals. In the meantime, delivery app users might consider comparing final checkout prices across multiple platforms before confirming orders – a practice that nearly half of delivery customers now report doing, according to a recent Angus Reid survey.
As this legal battle unfolds in the courts, it represents more than just a dispute over delivery fees – it highlights fundamental questions about transparency in digital commerce and where the line should be drawn between marketing strategy and consumer deception in our increasingly app-based economy.
