Deliveroo is quitting the Australian market, with the food delivery service announcing it had suspended orders made through its app and entered voluntary administration.
In an email to customers on Wednesday, the company said it had made the “sad announcement” to shut down its operations in Australia and appoint KordaMentha as administrators.
“This has been a difficult decision to make,” the company said.
“Deliveroo, like all other companies, is now doing business in challenging economic conditions, which requires us to take difficult decisions. We always aim to deliver the best possible service for our consumers wherever we operate, and if we cannot do that we will be prepared to review our position.”
The company said it had 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”.
Deliveroo was one of several food delivery services operating in Australia alongside Uber Eats, Menulog, HungryPanda and DoorDash.
Deliveroo said it would no longer accept orders through the app but customer’s account information would be available for up to six months. On Wednesday, customers were shown an error message in the app if they tried to place an order.
Like many gig economy companies operating in Australia, Deliveroo has in the past few years faced battles over workers’ rights. The company lost a Fair Work Commission case in May 2021 with the commission finding that sacking a rider for being too slow during the height of the Covid-19 pandemic was “harsh, unjust and unreasonable”. The decision was overturned on appeal in August this year.
Governments across Australia are increasingly seeking to regulate the industry. The federal government has promised to allow the Fair Work Commission to make orders for minimum pay and conditions for “employee-like forms of work”.
In June, Uber and the Transport Workers’ Union struck a landmark agreement on proposed employment standards and benefits, including jointly supporting the creation of a new independent government-funded regulatory body to create industry-wide standards for rideshare and food delivery gig workers following months of negotiations.