Food delivery company Foodora is pulling out of Australia, and will close its doors by August 20.
In a statement, Foodora said the reason for its Australian closure was to “shift [its] focus towards other markets where the company currently sees a higher potential for growth”.
The company has been competing against rivals including Uber Eats and Deliveroo.
Foodora said it would ensure that its employees, “support partners” and contractors found “suitable alternative roles”.
However, it appears Foodora has not informed its delivery riders about its impending closure.
Riders happy about the closure
“I feel weird … this is nice news. It’s like a dream come true,” John Chessal, a Foodora delivery rider, told the ABC.
“I know a lot of people who want to leave Foodora because it treats their riders badly.”
Two weeks ago, Mr Chessal was hit by a car on a busy Melbourne street while delivering for the company.
He sustained a back injury, and his bicycle was damaged beyond repair during the collision.
When Mr Chessal asked Foodora to contribute to his medical expenses, the company refused.
He said the company told him: “That is not our responsibility as you’re not an employee — every rider needs to look after himself on the road.”
Court cases outstanding
Although Foodora will no longer compete in the Australian food delivery business, it still needs to defend two lawsuits.
Later this month, the company will return to the Fair Work Commission to defend an unfair dismissal case.
It is also being sued by the Fair Work Ombudsman for sham contracting.
Basically, that means misrepresenting its employees as independent contractors (who are their own bosses, running their own businesses) — to avoid paying minimum wage, annual leave, sick leave and superannuation.
Foodora, and its competitors, maintain that its riders are contractors — despite the high level of control it exercises over them, and requirement to wear a uniform.