British food delivery service Deliveroo on Wednesday closed its Australian business, citing a tough business environment, as consumers pulled back on takeaways due to rising prices.
Deliveroo, which competes with rivals like Uber Eats and U.S. giant DoorDash said the market was highly competitive and the company did not hold a broad base of strong local positions.
In the first half of the year the Australian business had represented approximately 3% of Deliveroo’s total gross transaction value (GTV), it said.
It’s been a tough week for food delivery companies in Australia, first Deliveroo announcing it’s immediate departure down under and this morning Voly confirming it will also cease operations.
After being founded in 2020, Voly – an ultrafast grocery service – sprung to popularity during the nation’s lockdowns on the promise products would be delivered in just 15 minutes.
It was one of a number of small startups that looked to take advantage of the huge growth in online grocery shopping, offering a specially curated list of groceries and using a similar business model to Milkrun.
Grocery delivery service Voly has announced its closure in Australia.
Announcing the business’ closure overnight, Voly founders Thibault Henry and Mark Heath said the decision was made with a heavy heart.
“It’s with a heavy heart that we announce that Voly is officially closing in Australia,” a statement said.
“While we were able to build an amazing customer base, and lay the groundwork for a sustainable business in Australia, we have had to make the tough decision to exit the market during this period of global economic uncertainty.
“We are so honoured to have shared this journey with our team and customers.”
Voly is the latest lockdown-era startup to shut up shop, after competitors Send and Quicko also collapsed.
This was a difficult decision and not one we have taken lightly,” chief operating officer Eric French said in
a statement. “Our focus is now on making sure our employees, riders and partners are supported throughout this process.”
French said the company had determined that it could not reach a sustainable and profitable scale in Australia without considerable financial investment.
Local subsidiary Deliveroo Australia Pty Limited had been placed into voluntary administration and would permanently cease trading imminently, the company said in the statement.
Food delivery apps saw demand surge during the pandemic but have since faced challenges including customers reining in their spending and the tightening of regulations in several countries.
During Australia’s election campaign this year Anthony Albanese, who is now the country’s prime minister, said he would work to improve the rights of workers if his party came to power.
Members of his government have called gig work a “cancer” on the economy with accusations that it drives down the wages of a million workers.
Last month, Deliveroo also announced that it planned to quit the Netherlands market at the end of November.
Deliveroo’s London-listed shares have lost around half of their value since the start of this year.