Foodora pulls out of Australia

August 3, 2018
Gig economy businesses like Foodora have faced criticism in several countries over the treatment of workers

Food delivery service Foodora is pulling out of Australia, with the German-based firm saying it is shifting focus to other markets months after being hit with lawsuits over its treatment of workers.

Foodora, alongside rivals Uber Eats and Deliveroo, is among the meal delivery platforms in Australia 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.

Foodora has faced criticism from unions about its operations in recent months, and is facing a Federal Court action by the government's Fair Work Ombudsman (FWO).

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.

The case is believed to be the first of its kind in Australia.

Foodora has said it would not comment on the cases as they are before the courts.

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.

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.

Explore further: In test case for gig economy, UK court backs contractor

Related Stories

In test case for gig economy, UK court backs contractor

June 13, 2018

A London plumber who claimed he was unfairly dismissed after years of working as a contractor won a court ruling Wednesday giving him employment rights, in a closely watched case testing labor rules in the so-called gig economy.

UK panel rules Uber drivers have rights on wages, time off

November 10, 2017

Uber lost the latest round in the battle over its operating model Friday, when a British panel ruled that the company's drivers are workers, not independent contractors, in a decision with broad implications for the so-called ...

Uber in London court in employment case

September 27, 2017

Uber lawyers are in a London courtroom trying to overturn a ruling that its drivers are employees of the ride-hailing service—not independent contractors.

Judge allows expansion of Uber class-action suit

December 10, 2015

A judge opened the door Wednesday to expanding the number of drivers who can join a class-action suit against Uber contending they are treated like employees but get no employee benefits.

Recommended for you

Coffee-based colloids for direct solar absorption

March 22, 2019

Solar energy is one of the most promising resources to help reduce fossil fuel consumption and mitigate greenhouse gas emissions to power a sustainable future. Devices presently in use to convert solar energy into thermal ...

Paleontologists report world's biggest Tyrannosaurus rex

March 22, 2019

University of Alberta paleontologists have just reported the world's biggest Tyrannosaurus rex and the largest dinosaur skeleton ever found in Canada. The 13-metre-long T. rex, nicknamed "Scotty," lived in prehistoric Saskatchewan ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.