This doesn't seem that damning to me. It probably costs FedEx the same regardless of whether or not the address is business or residential these days, and it's not like there's some law that requires FedEx to charge a certain rate. The lawsuit could easily be worded "FedEx systematically undercharging residential customers for years, sealed e-mail says."
The tone of the article indicates that I'm supposed to be angry about this, but I'm just not feeling it today. Sorry.
"Rates and service quotations by our employees and agents are estimates and will be based upon information provided by you, but final rates and service charges may vary from the quotes based upon the characteristics of the shipment actually tendered to us. Any conflict or inconsistency between the FedEx Service Guide and other written or oral statements or quotes (except those found in a FedEx Sales or FedEx Express Customer Automation agreement) concerning the rates, features of service, and terms and conditions applicable to FedEx Express service will be controlled by the FedEx Service Guide, as modified, amended, changed or supplemented. "
Note: Rate differences are controlled by the service guide.
If the service guide says there should be no residential delivery charge, and they are adding one, that's a problem.
They also only reserve the right to charge the residential surcharge on certain places:
"We reserve the right to assess a Residential Delivery surcharge on any shipment
delivered to a home or private residence, including locations where a business is
operated from a home, or on any shipment in which the shipper has designated the
delivery address as a residence, including shipments where the delivery location has
been designated as Residential Delivery in error. "
The last part is what part of their defense will almost certainly be. As this email shows, however, they've apparently deliberately designated a large number of shipment delivery locations as residential delivery, meaning it was not "in error", but intentional.
Ignoring all of this, they are also usually forming binding rate contracts with businesses and governments (IE you agree to ship this many packages a year, we agree to charge you the rates in this service guide with 80% discount). Throw on top of that that deliberately overcharging the government is serious business in the US. It's often criminal, and IIRC, even in the civil side, you can keep a percentage of the money you recover by suing on their behalf.
they've apparently deliberately designated a large number of shipment delivery locations as residential delivery
More likely: they have a database or some other kind of service that maps addresses onto “residential” or “not residential”, and either they put off upgrading the database or have some flakiness in their code, so that a lot of addresses get incorrectly marked “residential”, and, well, when you’re prioritizing which bugs you need to fix, the bugs that make your company more money than it deserves usually don’t end up at the top of the list.
It probably costs FedEx the same regardless of whether or not the address is business or residential these days,
I sincerely doubt this is true.
There's probably significant economies of scale when delivering to commercial properties where the drivers can drop off multiple deliveries at once as opposed to home deliveries which would usually get a single package per stop.
Id think that the drivers that deliver to offices can drop 5-10x as many deliveries in a day compared to the residential drivers
I want you for a customer. I'll sign a contract to bill you for $100 an hour. Then when I send you the bill I'll make sure it's for $125, because hey if you don't like the price, you should have used someone else.
The problem is that they were tacking surcharges on that didn't apply after signing an agreement. That's breach of contract, which is somewhat different from just charging high prices.
The allegation is that FedEx established contracts with customers with a rate schedule that included surcharges for residential and extended-range delivery, then improperly charged those surcharges on deliveries to commercial/government locations where they did not apply, and did so knowingly and repeatedly.
Systematically overcharging customers strikes me as a valid tort.
The tone of the article indicates that I'm supposed to be angry about this, but I'm just not feeling it today. Sorry.