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Deliveroo, the British online food delivery service company, was revealed to have pulled out its business in Australia. It ended its service and decided to leave AU due to rigid competition there.
Deliveroo said on Wednesday this week that it will no longer operate in Australia as the business environment has become really tough. One of the reasons why the business turned this way was the customers’ move to pull away from deliveries and takeaways because of the rising prices.
Moreover, Deliveroo is also competing with other major brands, including Uber Eats and DoorDash. With these rivals, the market became highly competitive. The company also said that its market share is also small thus, its position is not really strong.
As per Reuters, in the first half of 2022, the Australian unit of Deliveroo only managed to contribute three percent of the company’s total gross transaction value or GTV. Prior to this, its HQ already warned that because of the rising prices that are turning people away from ordering online, sales growth would be at the lower end of its last guidance.
"This was a difficult decision and not one we have taken lightly. We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved with the Australian operations over the past seven years," Eric French, Deliveroo’s chief operating officer, said in a statement to investors. "Our focus is now on making sure our employees, riders and partners are supported throughout this process.”
The COO further explained that Deliveroo discerned that it would not be able to reach a sustainable and profitable level in Australia without large financial investment, so it made the decision to quit. Subsequently, Deliveroo Australia Pty Limited was placed into voluntary administration and will permanently stop operations soon.
BBC News mentioned that Deliveroo was first launched in Australia in 2015, and it has 15,000 riders as employees.
Photo by: Joshua Lawrence/Unsplash
