Deliveroo pulls out of Australia, leaving thousands without work

Deliveroo has announced it will end operations in Australia, citing “challenging economic conditions” behind the decision.

The company, which has entered administration, will leave 15,000 riders, 120 staff, and 12,000 partner restaurants in search of new work and a new service to deliver food.

“The company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo’s risk/reward thresholds,” the company said in a statement.

Eric French, Chief Operating Officer at Deliveroo, said it was a difficult decision to make and not one they have taken lightly.

“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.”

Firm KordaMentha has been appointed voluntary administrators and administrator Michael Korda said they had no alternative but to cease operations immediately in the absence of financial support.

“Deliveroo was unable to achieve sufficient market share in Australia to develop a sustainable business. To do so would require significant ongoing investment in the Australian market.”

Michael Kaine, National Secretary of the Trade Workers Union (TWU), said workers must be the priority for administrators while the Federal Government must urgently act on its commitment to gig reform and fair standards for all transport workers.

“Deliveroo’s sudden and cowardly act treating workers as callously in exit as it did in operation highlights the urgent need for the Federal Government to enact gig reform. 

“It is clear that urgent regulation is necessary to stabilise this industry and ensure workers are treated fairly, can work safely, and have secure jobs.”

Riders and restaurants are both considered unsecured creditors and must submit a proof of debt form to the administrator to make a claim on money they are owed.

“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,” said Kaine.

Deliveroo pulled out of the Dutch and Spanish markets earlier this year, and left Germany in 2019.

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