Steve is among thousands affected by Deliveroo’s collapse. Now he fears what could come next

Steve is among thousands affected by Deliveroo’s collapse. Now he fears what could come next

Updated: 2 months, 22 days, 4 hours, 13 minutes, 35 seconds ago
KEY POINTSDeliveroo said it could no longer remain competitive in Australia without significant investment.Its collapse will impact 15,000 delivery partners and more than 12,000 restaurants.The transport union is seeking an urgent meeting with Deliveroo administrators.

Steve Khouw has been a food delivery rider for five years and feels "completely blindsided" by Deliveroo's shock announcement that it would pull out of the Australian market.


Mr Khouw, who lives in Sydney, also delivers for UberEats and DoorDash. But he primarily worked for Deliveroo, and said its collapse will wipe out half his income.


The announcement has left Mr Khouw and thousands of his colleagues experiencing a wave of uncertainty about their careers.


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"It begs the question, how stable are all the other platforms? Are they able to continue running a business with the kind of business model?" he asked.


While he said he has other sources of income, he said others aren't as lucky and have expressed their fear over what will come next in the food delivery industry.


"To many of these workers, it's actually an important earning for the family and just for daily living," he said.

A Deliveroo driver handing a customer a bag of food.

Deliveroo revealed it had been placed into voluntary administration on Wednesday.

Source: AAP / Mikael Buck/PR Image

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 that 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.

'A shock to thousands of riders'

Transport Workers' Union (TWU) 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."

A man speaking

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.

Source: AAP

Mr Kaine labelled Deliveroo's move a "cowardly act" and said it showed an "urgent need" for the federal government to reform the gig economy.



"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," he said.


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".



While Mr Khouw began to sense the lack of stability within the gig economy, he said he was left "flabbergasted" that Deliveroo plummeted without providing notice to staff.


"Delivery is one of the largest [food delivery services]. That's where a shock comes from, I didn't really expect Deliveroo to give up too quickly," he said.


Deliveroo was one of the first meal-delivery services to launch in Australia, arriving one year before

UberEats

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.


SBS News has contacted Deliveroo and KordaMentha for comment.


With additional reporting by Rayane Tamer.