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Foodora pulls out of Australia, to leave other markets
BERLIN, Aug 4, 2018 (BSS/AFP) – Food delivery service Foodora is pulling
out of Australia this month, with the Germany-based firm saying it is
shifting focus to other markets months after being hit with lawsuits over its
treatment of workers.
The announcement came as Foodora’s parent company Delivery Hero said it
also planned divestment of its operations in France, Italy, the Netherlands
and Brazil, without specifying when it would do so.
Big cities worldwide have seen a proliferation of food delivery bikes and
mopeds zipping around the streets in recent years that have revolutionised
the industry and stoked debate, strikes and legal challenges over precarious
conditions for workers in the new “gig economy”.
In Australia Foodora, alongside rivals Uber Eats and Deliveroo, is among
the meal delivery platforms that allow people to order from local restaurants
via mobile phones.
“Foodora has announced… its decision to leave the Australian market and
cease operations in response to a shift in focus towards other markets where
the company currently sees a higher potential for growth,” the group said in
a statement Thursday.
The service, which entered Australia in 2015, will wind down and close by
August 20, the company said.
Also Thursday it said in Berlin that it planned to divest itself of
operations in France, Italy, the Netherlands and Brazil while buying online
food delivery operations in Romania and Argentina and taking a stake in a
Spain-based service that also operates in France and Italy.
Its CEO Niklas Oestberg told journalists that “we prefer to be leader, to
have scale” and that “in the markets where we are not leader, and we don’t
see a clear path to leadership … we will either sell … or eventually shut
down”.
– Legal test case –
Foodora has faced criticism from Australian unions about its operations in
recent months, and is facing a Federal Court action by the government’s Fair
Work Ombudsman (FWO).
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The ombudsman, which filed the legal action in June on behalf of three
workers in 2015, alleged that the company “engaged in sham contracting
activity that resulted in the underpayment of workers”.
The government agency said the delivery service breached Australian laws
by misrepresenting to the trio that they were independent contractors when
they were in fact employees of Foodora.
As a result, they were allegedly underpaid by the company.
The FWO said the lawsuit would serve as a test case for the rights of
workers amid the rise of gig economy businesses.
The Transport Workers’ Union claimed Foodora’s exit was so it could “avoid
responsibility for paying its riders millions of dollars in backpay as a
result of wage theft”.
The union said in March it was taking two cases to the Fair Work
Commission, Australia’s national workplace relations tribunal, alleging
Foodora unfairly sacked two delivery riders.
One rider, Josh Klooger, told national broadcaster ABC he believed he was
dismissed after two years with the company for talking about his pay and
conditions.
Foodora has said it would not comment on the cases as they are before the
courts.
– ‘Precarious’ workers –
Last month, food-bike delivery staff working for companies like Foodora,
Uber Eats and Deliveroo went on a week-long strike in France to demand better
pay and benefits.
They demanded standardised pay for a guaranteed minimum number of hours’
work per cyclist, as well as bonuses for working evenings, weekends and when
it is raining.
The cyclists accused the government of helping to make permanent what it
called “a system based on the precariousness of its workers” through planned
legislation.
And a Spanish court in June ruled that a Deliveroo rider should have been
treated as an employee, and not as a self-employed contractor, in the first
ruling over the rights of such workers in the country.
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