Deliveroo pulls out of Australian market

One of Australia's first meal delivery services has shut down, effective immediately, putting thousands of people out of work and telling customers they could "no longer place orders" with the service.

Deliveroo, which launched in Sydney and Melbourne in 2015, revealed it had been placed into voluntary administration on Wednesday and could no longer operate without making a significant investment in Australia to challenge its competitors.

The move will impact 120 staff members in Australia, as well as 15,000 delivery partners, and more than 12,000 restaurants who offered meals through the service.

In a statement, the UK-based company said it had made the "difficult decision" to pull out of the country after assessing the market.

"In Australia, we have concluded that achieving a sustainable position of leadership in the market is not possible with a disproportionate level of investment which would have highly uncertain returns," the statement said.

"Deliveroo Australia has ceased operations, meaning you can no longer place orders on Deliveroo in Australia."

Deliveroo appointed administrators from KordaMentha to wind up the company, with customers advised they could access their accounts and download information for six months before their accounts were closed.

Transport Workers' Union national secretary Michael Kaine said the group would seek an urgent meeting with Deliveroo administrators in a bid to secure assistance for delivery workers.

"This will be a shock to the thousands of food delivery riders who rely on Deliveroo for income," he said.

"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."

Mr Kaine said Deliveroo's announcement was reminiscent of Foodora's 2018 departure in Australia, which closed just months after the union launched legal action over its classification of employees as "independent contractors".

Deliveroo was one of the first meal-delivery services to launch in Australia, arriving one year before Uber Eats and the same year local company Menulog was acquired by British firm Just Eat.

At times, Deliveroo was the second most popular meal-delivery service in the country.

But while food deliveries thrived during COVID-19 lockdowns, more competition has entered the Australian market, including DoorDash, HelloFresh, and Hey You, while Menulog and Uber Eats have ramped up advertising campaigns.

Recent Roy Morgan research showed Uber Eats led the market in Australia, with 3.5 million customers.

Research also showed one in three Australians used meal delivery services, with city-dwellers, Millennials and Generation Z the biggest customers.