Caviar Class Action Alleges Delivery App Withholds Funds

A class action lawsuit claims that the food delivery service Caviar wrongfully keeps revenue from their partner restaurants.

Tiffin Cherry Hill and Tiffin Mount Airy, two related companies who operate Indian restaurants in New Jersey and Pennsylvania, claim that Caviar takes advantage of partnered restaurants by withholding funds.

Caviar is a food ordering and delivery platform similar to the popular DoorDash app.

The company reportedly “truly understands the art of food service” and restaurants who partner with Caviar “experience unparalleled service, increased sales and greater efficiency.”

Restaurants who wish to partner with Caviar are required to sign a delivery service agreement. The Caviar class action claims that when a customer places an order with Caviar to receive food from a restaurant, the platform “controls and possesses” the restaurant’s funds for a time.

Although restaurants assume they will be receiving a significant portion of the total price, Caviar allegedly deceives companies by withholding a significant amount of profit.

“Caviar deliberately conceals its over-withholding from restaurants by omitting the amount of the total price being remitted to the restaurants, instead non-transparently reporting that amount only in combination with the sales tax collected and paid to the restaurants,” the Caviar class action lawsuit alleges.

This behavior reportedly “mislead[s] the restaurants to believe they are receiving a greater portion of the total price than they really are.”

According to the Caviar class action lawsuit, withholding  funds violates the delivery service agreement. The terms of the agreement are redacted in the plaintiffs’ complaint, but states Caviar fails to adhere to the applicable contractual rate set forth in the agreement known as the “Caviar Revenue Share.”

“Caviar has withheld funds from Plaintiffs and other Class members in excess of the percentage of each order it is entitled to retain under the parties’ agreements,” argues the Caviar class action lawsuit.

“Plaintiffs and the other Class members have been injured as a direct and proximate result of Caviar’s wrongful assumption of ownership of funds that belong to Plaintiff and the other Class members by withholding such funds in excess of the rates agreed upon in the contracts.”

Caviar is accused of breach of contract, conversion and violation of California Unfair Competition Law. The Caviar class action lawsuit seeks; injunctive relief, compensatory damages, consequential damages, general damages, statutory damages, punitive damages, exemplary damages, disgorgement, restitution, interest, court costs and attorneys’ fees.

The plaintiff companies seek to represent a Class of restaurants who entered into a delivery service agreement with Caviar and whose funds were withheld by Caviar in excess of the Caviar revenue share. The Class could reportedly include thousands of companies.

Have you placed an order with Caviar? Let us know your thoughts on these allegations in the comment section below.

Plaintiffs and the proposed Class are represented by James C. Shah of Shepard Finkelman Miller and Shah LLP.

The Caviar Class Action Lawsuit is Tiffin Cherry Hill LLC, et al. v. Caviar Inc. d/b/a Try Caviar, Case No. 3:20-cv-00403, in the U.S. District Court for the Northern District of California.

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