Federal Regulators Target ‘Drip Pricing’ in Food and Grocery Delivery
The Federal Trade Commission (FTC) is currently evaluating whether to implement new federal regulations targeting fee structures within the food and grocery delivery sector. The move follows a preliminary rulemaking process initiated in April, which seeks to determine if current industry practices regarding service fees, delivery charges, and inflated menu prices constitute “unfair or deceptive” behavior.
At the center of the debate is the practice of “drip pricing,” where additional costs are revealed incrementally throughout the checkout process. According to the FTC, studies have indicated that total delivery costs can range from 25% to over 90% higher than the cost of picking up the same items in person. A recent study cited by the agency noted that consumers ordering through major platforms face an average cost increase of nearly 80% compared to direct pickup.
Industry Divide: Platforms vs. Merchants
The FTC’s inquiry has drawn a sharp line between delivery platforms and the merchants who rely on them. Independent restaurants and the National Grocers Association have expressed strong support for increased transparency, arguing that hidden fees often lead consumers to attribute high prices to the restaurants themselves rather than the delivery service.
For independent restaurants, which often operate on thin net profit margins of 3% to 5%, the pressure is significant. Platforms frequently charge commissions ranging from 15% to 30% per order, forcing operators to choose between raising menu prices—thereby alienating cost-conscious customers—or absorbing the costs and potentially operating at a loss.
Conversely, industry lobbying groups, including the Flex Association, contend that existing policy frameworks already encourage sufficient transparency. Instacart, in its response to the FTC, argued that mandatory all-in pricing could display confusingly high figures for individual items, potentially misleading consumers. Meanwhile, Grubhub has proposed that the FTC apply its own post-settlement transparency reforms across the entire industry, seeking a unified regulatory standard.
Revenue Scale and Regulatory Uncertainty
The economic stakes are substantial. DoorDash, which holds the largest market share in the U.S. food delivery sector, reported $11.46 billion in revenue for 2025, driven by a mix of consumer fees, merchant commissions, advertising, and membership programs. Despite its market position, DoorDash did not submit a formal comment to the FTC, though the record shows evidence of coordinated outreach efforts by delivery platforms using shared templates for worker and customer submissions.
Whether these proposed rules will reach implementation remains uncertain. The FTC’s previous junk fee rule for the hospitality and ticketing industries took approximately two and a half years to finalize. A similar timeline for the food delivery sector would push potential implementation into late 2028. Furthermore, political headwinds and dissenting opinions within the Commission suggest that the path to a federal mandate will be complex, particularly as current proposals would exceed the scope of existing state-level junk fee legislation.
As the FTC reviews hundreds of stakeholder comments, the outcome will likely hinge on whether regulators view the current checkout experience as a violation of consumer protection standards or a standard feature of a competitive digital marketplace.
