Australia

Deliveroo has served up its last supper. What now for the delivery industry?

Highlights
  • Deliveroo has shut down its Australia operations.
  • Other services are offering employment to affected drivers.
  • Experts say the gig economy exploits workers.
Food delivery company Deliveroo’s sudden closure of its Australian business has raised concerns among restaurant owners and gig economy drivers about the future of the contactless delivery industry.
Experts believe one of the factors that caused Deliveroo to leave Australia is the proposed legislation from the Fair Work Commission that would regulate the gig economy, expected to be introduced from the first half of 2023.

Associate Professor in Urban and Cultural Geography at Melbourne University David Bissell told SBS News that while it’s “fantastic” there’s new state and federal legislation being proposed, many companies are dependent on the “poor” conditions of workers.

“Profitability in many of these companies is, of course, contingent on the low pay, and poor conditions of these workers,” he said.
“To improve the conditions and pay of these workers is going to require a radical change in terms of how these companies run.”
Mr Bissell said other operators could also shut down operations due to cost of living pressures causing fewer Australians to order food online.

If that were to happen as it has with Deliveroo, gig workers would have no protection, experts said.

What have other food delivery companies said?

But other delivery services operating in Australia have been quick to offer employment to workers who will have lost their jobs from Deliveroo’s closure, and say they are committed to improving working conditions for drivers.
A Menulog spokesperson told SBS News that the company is “supportive of the federal government’s intent to implement minimum standards for contract couriers and welcome a level playing field across the industry”.
Rebecca Burrows, general manager of DoorDash Australia, said affected drivers should sign up to DoorDash and that the company supports regulation.
“This is a difficult time for Deliveroo’s team, partners and riders, however we know there is plenty of opportunity in Australia, too,” Ms Burrows said.
“We are optimistic there is a path to reform that provides workers in this sector with additional benefits and protections and also supports the ongoing sustainability of this important industry in Australia.”
But even with options at other services, gig worker Nabin Adhikari said drivers are “worried everywhere about their job security”.
“With one blink, everything is gone,” he said.

“Foodora fled the country four years ago … and now Deliveroo is cowardly fleeing the country too,” he said.

Mr Adhikari said while it’s positive companies like Uber and DoorDash have been open to implementing regulation, there needs to be industry-wide legislation to protect drivers.
“We still have never had a clear-cut regulating legislation on how everyone can be kept together and reassure their security,” he said.
In June, Uber and the Transport Workers’ Union (TWU) struck a deal for creating minimum and transparent enforceable earnings, benefits and conditions for drivers.
In September, Deliveroo Australia chief executive Ed McManus told the AFR gig economy executives had been told to expect legislation in the first half of 2023 that will expand the powers of the Fair Work Commission to set minimum pay and conditions for their workers.
It came after a round table discussion with the Department of Employment and Workplace Relations.
Deliveroo’s exit has also affected restaurant owners like Nick Tuckwell, who told SBS News that 30 per cent of his business “disappeared yesterday”.
“We’ll have to regroup obviously, and the priority for today is to get supply back to customers as quickly as possible,” he said.

“I would have thought they had an obligation to us to let us know where they were at. Unfortunately, they didn’t and we have to pick up the pieces now.”

‘The gig economy isn’t working for workers’

Greens leader Adam Bandt told SBS News that Australia needs to implement a “hard floor” for workers, so that “big corporations can’t use legal terminology to rob them of their basic rights”.
“The gig economy just isn’t working for many workers,” he said.

“What we’re finding out is that the convenience of these services is often built on people doing dangerous work — riding around cities in dangerous conditions — for less than the minimum wage.

“Big corporations have been allowed to flourish with a business model that’s based on exploitation.”
Mr Bandt said “all workers” should be entitled to basic benefits like sick leave, annual leave and a fair wage.
Mr Bissell also called for greater rights for gig economy workers, especially in the light of the pandemic and working without sick leave.
“Especially during the COVID pandemic, and the kind of pressures of continuing to have to work when you’re sick, just to make ends meet,” he said.
“Taking risks where other people wouldn’t have to, especially given the terrain that a lot of these people are working in— they’re driving during all kinds of dangerous weather.
“It’s a hazardous job and these companies are not sufficiently protecting them.”
Deliveroo Australia has appointed KordaMentha as voluntary administrator of the Australian branch of UK-based company.

It will continue to operate in 11 other countries.

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