One of Australia’s first food delivery services has closed with immediate effect, putting thousands of people out of work and telling customers they can “no longer place orders” with the service.
Deliveroo, which launched in Sydney and Melbourne in 2015, revealed on Wednesday it had been placed under voluntary administration and could no longer operate without making a significant investment in Australia to challenge its competitors.
The move will affect 120 staff in Australia, as well as 15,000 delivery partners and more than 12,000 restaurants that offered meals through the service.
In a statement, the UK-based company said it had made the “difficult decision” to leave the country after assessing the market.
“In Australia, we have concluded that sustainable market leadership cannot be achieved with a disproportionate level of investment that would have highly uncertain returns,” the statement said.
“Deliveroo Australia has stopped working, which means you can no longer place orders on Deliveroo in Australia.”
Deliveroo appointed KordaMentha administrators to liquidate the company, advising customers to access their accounts and download information for six months before closing their accounts.
Transport Workers’ Union national secretary Michael Kaine said the group would seek an emergency meeting with Deliveroo executives to get help for delivery drivers.
“This will come as a shock to the thousands of food deliverers who depend on Deliveroo for revenue,” he said.
“The TWU has urgently sought consultations with administrators about what rights can be reclaimed for food delivery workers who are at risk of losing their jobs in the blink of an eye.”
Mr Kaine said Deliveroo’s announcement was reminiscent of Australia’s 2018 departure from Foodora, which came several months after the union took legal action over its classification of workers as “independent contractors”.
Deliveroo was one of the first food delivery services to launch in Australia, a year before Uber Eats and in the same year local company Menulog was acquired by British company Just Eat.
At times, Deliveroo was the second most popular food delivery service in the country.
But while food delivery has thrived during COVID-19 lockdowns, more competition has entered the Australian market, including DoorDash, HelloFresh and Hey You, while Menulog and Uber Eats have stepped up advertising campaigns.
Recent research by Roy Morgan found that Uber Eats is the market leader in Australia, with 3.5 million customers.
Research also found that one in three Australians used food delivery services, with urban dwellers, millennials and Gen Z being the largest customers.