Food delivery service DoorDash has been fined $2 million for inundating customers and delivery drivers with texts and emails.
Australia’s spam regulator, the Australian Communications and Media Authority, is also warning other large businesses not to make the same mistake, urging companies to review compliance with spam laws in a crackdown on offending communiques.
DoorDash has agreed to pay the fine after a review found it had sent more than 1 million texts and emails to its customers and drivers over an eight-month period between February and October 2022.
This included sending 566,000 emails to people who had asked to unsubscribe from the company’s updates. Over the same period, DoorDash’s team of drivers received 515,000 texts without providing them with an option to unsubscribe from the barrage of messages.
Australia’s home-delivery sector has been punished over the past 12 months after the initial boost of COVID lockdowns to their coffers, with food-focused delivery groups such as Milkrun and Providoor collapsing into administration or liquidation.
According to DoorDash’s most recent accounts filed with the corporate watchdog, it recorded a $6 million loss for the year to December 31, 2022. Its accounts also show it received an $84 million cash injection from its US parent and other related entities during the year. Even after its loss-making performance, the group had $86 million in cash at the end of the financial year.
A DoorDash spokesperson said: “The investigation was the product of Dasher onboarding communications that were mistaken for transactional messages and a technical error in our consumer messaging system that has since been remediated.”
In addition to the fine, DoorDash will be subject to an enforceable undertaking with the communications authority over the next three years which will require it to appoint an independent consultant to review its compliance with spam rules.
ACMA began an investigation into DoorDash after complaints from customers. The regulator also said it had received complaints from people who had requested information about becoming a driver or had started the onboarding process to become a driver.
ACMA chair Nerida O’Loughlin said spam compliance was an ongoing priority for the authority as the agency continued to find breaches across businesses that should know better.
“Australians find it incredibly frustrating when they receive marketing messages from businesses like DoorDash after they have taken the time to unsubscribe,” O’Loughlin said.
“It is unacceptable that DoorDash’s prospective contractors were sent messages without an unsubscribe facility about a business opportunity that they may not have wished to pursue.”
A key element on DoorDash’s breach of the law was its use of marketing material in emails and messages it had sent to inform prospective contractors. This included offers and incentives to promote the role of being a delivery drivers to potential applicants.
“DoorDash is a large business conducting high-volume marketing, so there is no excuse for non-compliance. This is a further warning to all businesses that engage in email and SMS marketing that now is the time to review your spam compliance.”
ACMA has fined Australian businesses more than $10 million in penalties over the past 18 months.
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