Deliveroo Pulls Out Of Australia Amid Tough Competition

LONDON, ENGLAND – MARCH 31: A Deliveroo rider near Victoria station on March 31, 2021 in London, … [+] England. The food-delivery service’s market debut was off to a tough start as shares slid significantly from its initial public offering price of £3.90. (Photo by Dan Kitwood/Getty Images)

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Deliveroo, the British food delivery player, is pulling out of the Australian market.

The company has suspended operations and appointed administrators to wind up the business in the country, in what it calls a “difficult decision” to make.

In a statement, it said that it is not possible to “reach a sustainable and profitable scale in Australia”, referencing the stiff competition that exists in Australia. Chief rivals DoorDash and Uber Eats operate in the market as well.

“This was a difficult decision and not one we have taken lightly,” chief operating officer Eric French said.

“We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved with the Australian operations over the past seven years. Our focus is now on making sure our employees, riders and partners are supported throughout this process.”

According to Deliveroo, the Australian business accounted for just 3% of its total gross transaction value in the first half of this year.

Much like in other markets, Deliveroo faced criticism over the categorization of its delivery riders as contractors rather than employees.

In Australia, it has had a to-and-fro with regulators. Last year it was reprimanded by authorities for firing a delivery rider that was too slow with his deliveries. That decision was reversed earlier this year on appeal.

The Transport Workers’ Union, an organization representing Australian gig workers, said it is seeking an urgent meeting with Deliveroo’s administrators to discuss the rights of workers that have been affected by the sudden move to shut down operations.

“This will be a shock to the thousands of food delivery riders who rely on Deliveroo for income. The TWU has sought urgent consultation with administrators on what entitlements might be clawed back for food delivery riders who stand to lose their jobs in the blink of an eye,” TWU national secretary Michael Kaine said.