Restaurants blindsided by sudden Deliveroo Australia collapse ahead of dinner rush

The 14,000 Australian restaurants using Deliveroo Australia as a delivery partner learned the company had ceased operation at the same time as riders and diners, with small hospitality venues given no prior warning ahead of Wednesday’s busy dinner period.

Deliveroo Australia made the shock announcement to leave the local market yesterday afternoon, stating its local operations account for 3% of global transaction values but that the cost of operating an Australian wing is too high to sustain.

A highly concentrated delivery platform market including Uber Eats, Menulog, and DoorDash means the company “cannot reach a sustainable and profitable scale in Australia without considerable financial investment”, it said.

Deliveroo Australia’s UK-based parent company is not willing to provide that extra capital injection, it added.

The result was the immediate cessation of Deliveroo Australia’s operations and the appointment of Michael Korda, Andrew Knight and Craig Shepard of KordaMentha as voluntary administrators of Deliveroo Australia Pty Limited.

SmartCompany understands Australian restaurants were not informed of the decision ahead of time as Deliveroo, which is listed on the London Stock Exchange, was obliged to inform the UK market of any material changes to its operations before informing local businesses.

The decision also appears to have shuttered Deliveroo Australia’s ‘Editions’ kitchens, which served as delivery-only ‘dark’ kitchens servicing orders placed on the app without any physical storefront.

Taking to Twitter, food writer and restaurant reviewer Dani Valent shared a text she said was from a Melbourne hospitality worker claiming ‘dark kitchen’ workers in Collingwood, Melbourne were being “locked out” of the premises at 6pm.

Dark kitchens are part of ecosystems that also supply restaurants. This will be so disruptive. pic.twitter.com/1ybuyklgLn

— Dani Valent (@danivalent) November 16, 2022

With some businesses likely to have outstanding income resting with Deliveroo Australia when its services shut off, restaurant partners and other creditors have been advised to seek further information through KordaMentha ahead of the first creditor’s meeting next Monday.

More to come.