Deliveroo pulls out of Australia leaving driver and restaurant carnage in its wake

Deliveroo has pulled its operations out of Australia and entered administration.

In doing so, the food delivery service leaves 15,000 local riders and thousands of restaurants in its slipstream.

KordaMentha will administrate the wind up the Australian arm of the business

"We have today (Wednesday) made the sad announcement that we are leaving Australia," the company wrote in an email to clients.

"This has been a difficult decision to make. We have enjoyed serving you the amazing food that Australia is known for, working with thousands of brilliant restaurants and riders."

Customers will no longer be able to use the service, however accounts will remain open for six months to enable them to download their information.

Deliveroo blamed "challenging economic conditions, which requires us to take difficult decisions".

Deliveroo has been active in Australia since 2015, well before Uber, but was unable to keep up with its rivals including Menulog and DoorDash.

"In Australia, we have concluded that achieving a sustainable position of leadership in the market is not possible without a disproportionate level of investment which would have highly uncertain returns," the company concluded.

2022 has been a tough time for the company, seeing it pull out of Australia aloing with markets in the Netherlands and Spain. It pulled out of Germany in 2019 just before the pandemic.

Deliveroo had more than 12,000 partner restaurants and employed approximately 120 staff in Australia.

"Our priority is to execute an orderly wind-down of the Australian operations to achieve the best outcome for all stakeholders," KordaMentha stated.

The administrator is working to calculate and secure outstanding pay and entitlements. Delivery riders will be treated as unsecured creditors, not employees and will have to submit a proof of debt form to the administrator to make a claim.

Not every claim will be guaranteed to be paid in full.

"This will be a shock to the thousands of food delivery riders who rely on Deliveroo for income," Transport Workers' Union national secretary Michael Kaine said.

Kaine said it highlighted the "urgent need" for reform for gig workers.

"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," he said.

Restaurants are also considered unsecured creditors.

Jonathan Jackson - 17-11-22