S. 4401: Promoting Real-time Information on Cost Expenditure Act

This bill, titled the Promoting Real-time Information on Cost Expenditure Act or the PRICE Act, aims to regulate the pricing practices of third-party delivery platforms. It introduces a series of requirements intended to increase transparency and fairness in the fees charged by these platforms for delivery services. Here is a detailed summary of the main provisions:

Definitions

The bill provides definitions for several key terms:

• Commission: Refers to the Federal Trade Commission (FTC).
• Delivery fee: Any additional fee imposed by a third-party delivery platform for an order placed through it, beyond the regular price charged by the retail establishment.
• Retail establishment: A physical location where items, including food and other goods, are sold to customers, either in-person or through a third-party platform.
• Third-party delivery platform: An online service that facilitates same-day delivery of items from retail establishments and is not owned by those establishments.

Pricing Requirements for Third-party Delivery Platforms

Starting 90 days after this bill is enacted, third-party delivery platforms must adhere to specific pricing practices:

• If delivery fees are charged, they must be calculated based on predetermined factors that do not change once the user begins an order.
• These fees must be based on:
  • The retail price of items (excluding taxes and platform fees).
  • Factors related to delivery, such as distance, but not based on user characteristics or negotiations between the platform and the retail establishment.
• When users select items, the platform must prominently display:
  • The price charged by the retail establishment.
  • Any applicable delivery fees for those items.
• The platform must continuously show the total cost for the order that includes the items, taxes, and fees.
• Before finalizing payment, users must receive a clear explanation of delivery fees and their relevance to each item ordered.

Enforcement

The enforcement of this bill is primarily the responsibility of the Federal Trade Commission:

• Violations are treated as unfair or deceptive marketing practices under existing law.
• The FTC will have the authority to create regulations to implement the provisions of this bill.
• State attorneys general can also bring civil actions if they believe state residents are adversely impacted by violations.

Other Provisions

The bill clarifies that it does not prevent users from tipping delivery personnel. It also outlines how grievances can be addressed through both federal and state legal systems, allowing for collaborative enforcement actions by the FTC and state attorneys general.

Relevant Companies

• DASH (DoorDash) - As a major third-party delivery service, DoorDash would need to adjust its pricing methodologies to comply with the new regulations regarding delivery fees and transparency in pricing.
• GRUB (Grubhub) - Similar to DoorDash, Grubhub would be impacted by the requirements for transparent pricing and need to comply with the billing details mandated by the bill.
• UBER (Uber Technologies Inc.) - Uber Eats, a key component of Uber's business, would be required to adhere to the new rules on pricing and delivery fee disclosures, potentially altering its fee structures.