DoorDash, the delivery service known for screwing over its delivery workers with an elaborate tip-skimming scheme, is reportedly acquiring upscale food delivery platform Caviar in a deal valued at $410 million.
Caviar’s parent company Square announced the news during its second-quarter earnings on Thursday. According to its Q2 shareholders letter, the multimillion-dollar sale will be paid for with a mix of cash and DoorDash preferred stock. It comes nearly two years after Square was reportedly looking to offload Caviar but was having difficulty finding a buyer.
In a statement, Square CEO Jack Dorsey—who also happens to be the CEO of a strong contender for worst site on the internet—said in a statement that his company was “increasing our focus on and investment in our two large, growing ecosystems—one for businesses and one for individuals.”
“This transaction furthers that effort, and we believe partnering with DoorDash provides valuable and strategic opportunities for Square,” he added.
Tony Xu, DoorDash co-founder and CEO, touted the acquisition in a statement as integral to growing its merchant offerings, and more questionably, “another important step forward on our mission to empower local economies.” (Delivery apps, and DoorDash in particular, have been accused of pissing off and even hurting local eateries.)
“We have long-admired Caviar, which has a coveted brand, an exceptional portfolio of premium restaurants and leading technology,” Xu said. “The acquisition further enhances the breadth of our merchant selection, enabling us to offer customers even more choice when they order through DoorDash. We look forward to welcoming the Caviar team to DoorDash and expanding our partnership with Square in the future.”
The acquisition comes at what could be a pivotal time for DoorDash as the company grapples with fallout over its controversial pay model, which uses customer tips to offset the per-delivery earnings of its couriers. After months of pressure and after previously refusing to budge on the issue, Xu switched course last week following a recent New York Times report and said in a series of tweets that DoorDash would be changing its model.
“Going forward, we’re changing our model—the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order,” Xu said at the time. “We’ll have specific details in the coming days.”