Deliveroo lost $120M in 2022 before fleeing Australia and leaving workers and restaurants out of pocket

It’s no surprise Deliveroo went into administration in Australia.

The food delivery platform accumulated losses of more than $120 million this year and was losing $3 million in cash per month.

Deliveroo pulled out of Australia in November, after never posting a profit. It is also exiting the Dutch market.

The company’s decision to quit Australia left 121 Australian staff, 15,000 riders and 12,000 restaurants without work from the platform.

The UK parent company which is backed by Amazon owed $1.8 million to both riders and restaurants.

The Transport Workers’ Union accused the company of leaving “a trail of destruction [for] thousands of riders who lost their jobs with the click of a button”.

The union also blasted a proposed deal to pay out $9.5 million to riders, employees and restaurants and labelled Deliveroo “corporate pirates”.

Administrator KordaMentha has backed the deal.

“The company had incurred material trading losses since inception, incurring an average cash loss of approximately $3 million per month throughout 2022,” the administrator’s report said.

“COVID-19-related lockdowns led to a significant increase in the company’s revenue during 2020 and 2021, peaking at $14.9 million in net revenue during August 2021. However, these levels were not maintained during 2022.”

KordaMentha has stated a proposed Deed of Company Arrangement that proposes $9.5 million be paid to the delivery service’s employees, riders, restaurant partners and suppliers by January as a win for all.

It also supported a second creditors meeting for 21 December.

It says that $9.3 million is above and beyond the company’s statutory entitlements.

The proposal equates to an initial two weeks’ pay – based on average weekly earnings over the past 12 months and an extra week’s pay upon acceptance of the deed.

TWU National Secretary Michael Kaine has said the collapse highlights the need for the federal government’s planned reforms to the gig economy.

“This draft report hasn’t moved an inch on the compensation Deliveroo will pay the thousands of delivery riders who lost their jobs with the click of a button, despite having built the company from the ground up,” Kaine said.

“A modest payment will be made to riders, but Deliveroo has left a trail of destruction in its wake, exploiting out-of-date laws to avoid paying workers what they really deserve.”

Kaine has also accused Deliveroo of trying to shut down a wage theft claim against it.

“The TWU has asked the judge to make a ruling on the Jeremy Rhind underpayment case still before the courts,” he said.

“But with recent High Court decisions moving the dial significantly against workers, it’s critical the federal government moves urgently on its commitment to empower the Fair Work Commission to establish fair standards for transport workers to stabilise the industry and protect workers’ job security and entitlements from corporate pirates like Deliveroo.”

Jonathan Jackson - 15-12-22