Meal delivery service Deliveroo entered voluntary administration on Wednesday citing inability to continue operations without significant investment.
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The loss leaves thousands of workers without an income as operations were ceased yesterday.
In a statement announcing the decision, general manager Ed McManus said the move was one of "deep regret".
"This has not been an easy decision to make - we have carefully considered all options and we do not take the decision lightly," the statement said.
"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."
Across Australia, Deliveroo has over 15,000 delivery partners and more than 12,000 restaurants.
What does this mean for customers?
There's now one less option to have food delivered.
Deliveroo Australia has stopped accepting orders from Wednesday onwards, ceasing operations immediately.
What does this mean for workers?
Thousands of workers have abruptly lost a source of income.
Deliveroo had previously come under fire for opposing reform supported by counterparts Uber and DoorDash that improved working standards for riders.
The gig economy - the system in which Deliveroo utilised to employ its fleet of delivery people - has broadly been criticised for skirting pay rates and providing sub-par protections for workers.
Deliveroo said riders who recently worked with the service will receive further communications from administrators shortly and fees for orders completed through the end of Monday were paid out on Tuesday.
"All other outstanding fees, such as tips, will be reviewed as part of the administration process," the statement read.
"You will still be able to access your account in the rider app to see your rider ID and your past earnings, but you will not be able to go online."
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Transport Workers Union (TWU) national secretary Michael Kaine said workers must be the priority for administrators.
"These are workers that have been ripped off minimum wage and other rights, and put under deadly pressure to prioritise speed over safety when delivering food," Mr Kaine said.
"Deliveroo's sudden and cowardly act treating workers as callously in exit as it did in operation highlights the urgent need for the Federal Government to enact gig reform.
"Transport workers were hit first and hardest by the gig tsunami and are now being left high and dry by Deliveroo at the first indication that it can't rely on exploitation to make profits."
What does this mean for businesses?
Hospitality businesses that offer takeaway options have one less provider to choose from.
Australian Food Advocacy Body director Wes Lambert said the decision was "devastating" for the industry.
"And [for] over 12,000 restaurants that can no longer deliver using Deliveroo, the 15,000 plus riders and delivers, and for the staff of Deliveroo," he said.
"Margins are razor thin in the Online Food Delivery segment of the supply chain, under 2 per cent profit according to Ibis World Feb 2022, and this voluntary administration is proof that with rising interest rates and the cost of doing business skyrocketing, there will be causalities."
