Following a filed 8-K with the Securities and Exchange Commission, DoorDash and Olo have reached a settlement agreement.
Overcharged
The initial complaint was filed in New York State Supreme Court on March 31. It accused Olo of defrauding DoorDash by charging them higher fees than their rivals. Last year, the overcharge was discovered when DoorDash acquired former rival Caviar. They found out that their delivery fees were “significantly lower” than DoorDash’s.
The companies had an agreement with a clause. It would promise DoorDash would not be charged more fees than other food delivery brands.
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New Agreement between DoorDash and Olo
DoorDash had claimed damages of up to $7 million. But, the agreed-upon settlement calls for Olo to grant the platform a $25 million letter of credit. DoorDash’s legal charges have since been settled and dismissed by both firms. According to the SEC filing, Olo’s letter of credit would “guarantee any unpaid and owed amounts”.
Chief Revenue Officer of DoorDash, Tom Pickett, said: “We are pleased to have resolved this matter and continue to work together for the benefit of our merchants.”
“Today’s announcement of a multi-year collaboration with DoorDash reflects our commitment to best serve the restaurant industry,” said Marty Hahnfeld, Chief Customer Officer of Olo. “We look forward to our continued partnership over the years ahead.”
The new contract’s terms will be in effect for three years, until April 2024, with the option to extend for a fourth year.
Original source: https://www.businesswire.com/news/home/20210422006121/en/
