DoorDash drops fraud lawsuit against Olo
Third-party delivery company DoorDash and b2b software company Olo reached $ 25 million credit deal after DoorDash filed a complaint against the company last month, according to an 8-K filed Thursday with the Securities and Exchange Commission. The two companies also agreed to settle and dismiss DoorDash’s legal claims.
DoorDash’s initial lawsuit, filed in the New York State Supreme Court on March 31, accused Olo of fraudulently charging them higher fees than their competitors, a claim that was uncovered last year when the company acquired the former competitor Caviar and noted that their delivery costs were “significantly lower” than that of DoorDash.
Although DoorDash initially sought more than $ 7 million in damages, the agreed settlement instead requires Olo to issue a $ 25 million letter of credit to DoorDash. The two companies also struck a new deal, replacing their previous 2017 contract, which DoorDash said had been breached. The terms of the new contact will continue for three years until April 2024, with the possibility of renewing it for a fourth year.
“We are pleased to have resolved this issue and to continue to work together for the benefit of our merchants,” said Tom Pickett, Director of Revenue for DoorDash in a statement.
The new contract will allow the two companies to continue to “work together on products and features to unlock value for both parties and their shared merchant base,” the statement said.
“Today’s announcement of a multi-year collaboration with DoorDash reflects our commitment to best serve the restaurant industry,” Marty Hahnfeld, director of clientele for Olo, said in a statement. “We look forward to continuing our partnership in the years to come.”
Contact Joanna at [email protected]
Find her on Twitter: @JoannaFantozzi