By: Serach Nissim
Several of New York City’s leading moving companies are having a legal dispute over software.
As reported by Crain’s NY, a lawsuit has been filed recently in federal court in the Southern District of New York by Dumbo Moving and Storage alleging competitors Piece of Cake Moving and Storage and Simply Moving and Storage are illegally using proprietary technology. Dumbo, the Brooklyn based company led by Lior Rachmany, is asking to court to award his company $20 million in damages. The crux of the lawsuit is based on software designed by Dumbo to hand it a competitive advantage by automating lead generation, providing online quotes and tracking job progress, the company said. The technology helped the company increase its revenue from $17.5 million in 2017 to $36 million in 2020, per the lawsuit.
As per Crain’s, Rachmany alleges his former employee Volodymyr Plokhykh introduced him to IT Dev Group, without disclosing he was also a stakeholder in the firm. They sealed an agreement for the software program, which was supposed to be used exclusively by Dumbo. As per the lawsuit, Dumbo invested over $100,000 in the development of the software over a two-year period. The lawsuit says that after the software made gains, in 2018, Plokhykh allegedly sold the same technology to Piece of Cake Moving, which was founded in 2017 by a former employee of Dumbo Moving, Vojin Popovic, as well as to Simply Moving, also founded in 2017 by former Dumbo employee Stefan Marcali. The only alteration made to the software was that Piece of Cake’s and Simply Moving’s quotes would always be lower than Dumbo’s, the complaint alleges. Plokhykh created a dummy website, qqmoving.com, which demonstrates how the software works and quotes prices, in a bid to allegedly sell the tech to Dumbo’s competitors and other moving companies across the country.
The suit says, that it was in the summer of 2020 when Dumbo got a clue as to what was happening when potential clients said they had gotten quotes from Piece of Cake that looked almost exactly like his except the price was quite cheaper.
Following a probe, Dumbo figured out that Plokhykh used his ties with the program developer to access the software’s source code, per court papers. Plokhykh has since been fired by the moving company as well as the IT firm. Rachmany alleges in the lawsuit that Dumbo’s competitors are still using the software illegally. Piece of Cake Moving declined to comment. Simply Moving did not respond to Crain’s request for comment
Dumbo was started in 2006 with one moving truck, and has expanded over the years to one of the top companies in the industry. As per the company website, it now boasts 82 vehicles, 8 tractor trailers, and a multi-story 105,000sf storage facility in Newark, NJ. In 2016 Dumbo was voted the #1 moving company in the country.