[ad_1]
Food delivery app DoorDash is claiming “tens of millions of dollars” in damages from its partner, software publisher Olo, accusing it of violating a contract and fraudulently overcharging it.
Olo is a software company that helps restaurants like Shake Shack and Chili’s manage their online orders. The company went public on the New York Stock Exchange in mid-March, expanding its presence at a time when online food orders are booming. Its stock jumped 39% on day one. However, Olo’s stock fell 7% on Wednesday, at some point to its lowest level since its debut, as further details of its litigation with DoorDash were disclosed in court documents in court on Tuesday. Supreme Court of the State of New York.
DoorDash told the court it was overcharged by Olo, who promised the delivery app that his charges “would never be higher than the charges billed to any other delivery platform provider.” The two companies formed a partnership in 2017, and since then the delivery app has accounted for nearly 20% of Olo’s revenue. This contract runs until March 2022.
“To maximize income from its IPO, Olo cheated on its biggest trading partner,” DoorDash said in the legal document.
DoorDash claimed to realize it was overcharged after acquiring another Caviar food delivery provider in 2019.
When DoorDash allegedly confronted Olo with evidence of these violations, he said that Olo told the company that the clauses “simply disappeared after six months thanks to a minor contract rider dealing only with the charges themselves and that DoorDash had never been entitled to the lowest fees “.
Olo has also previously claimed that he does not consider Caviar a competitor to DoorDash because Caviar’s customers are restaurants in a higher price range than DoorDash.
Olo disclosed the disagreement between the companies in his S-1 filing with the Securities and Exchange Commission in February. He said DoorDash was seeking “damages in excess of $ 7.0 million”.
In the court filing Tuesday, DoorDash said the actual amount could be higher, possibly “tens of millions of dollars” if Olo had honored his deal.
On Wednesday, Olo said: “DoorDash’s allegations are baseless.” He declined to comment further on the ongoing litigation, saying “the evidence speaks for itself.”
The Financial Times was the first to report on DoorDash’s latest court filing.
[ad_2]
Source link