A food delivery driver for Foodora cycles in downtown Milan, Italy, May 18, 2018.
A food delivery driver for Foodora cycles in downtown Milan, Italy, May 18, 2018. Reuters/Stefano Rellandini

Foodora is quitting Australia. The Berlin-based online food delivery service will stop operating this month amid accusations of sham contracting and staff underpayment.

On Thursday, Foodora announced that it would be leaving the Australian market “in response to a shift in focus towards other markets where the company sees a higher potential for growth.” It said it would ensure that its employees, contractors and support partners find “suitable alternative roles” before it closed on Aug. 20.

“We wish to express our gratitude to all of our customers, contractors and employees for their dedication to Foodora Australia, and for allowing us to be a part of their everyday,” country manager Jeroen Willems said. “It has been a privilege to bring the food you love right to your door.”

According to the email sent by Willems to its contractors, as tweeted by journalist Hamish Macdonald, the contractors, or their food delivery workers, they would be refunded of their deposit once they returned their food boxes and backpacks in “like Brand New condition” from Aug. 6 to 24. Their shifts will be available as per normal until Aug. 10. After that and until Aug. 20, there will be a wind down of services with fewer shifts available.

Foodora was sued by the Fair Work Ombudsman in June for apparently breaching sham contracting laws and underpaying workers. It said it misrepresented regular employees as independent contractors. And because it allegedly paid the workers contractor rates rather than employee rates, it had underpaid their minimum law wage rates and other payments.

It was also sued by a former food delivery rider who claimed he was unfairly dismissed by the company. Josh Klooger said he was fired by the company for publicly talking about his pay and conditions.

Foodora must still defend itself from the two lawsuits even though it will close later this month.

Reactions from the riders about the news are more positive than negative. According to John Chessal, a deliver rider, Foodora’s closing was “nice news. It’s like a dream come true.”

“I know a lot of people who want to leave Foodora because it treats their riders badly,” he told the ABC. He said when he was hit by a car on a Melbourne street while on the job two weeks ago, the company refused to pay for his medical expenses because it apparently was “not our responsibility” as he was not an employee.

Icce Mejia is also working for Foodora. He did not believe the company’s reason for leaving Australia. He told the ABC that the company had so many problems and that its excuse that it was “shifting its focus to other markets” sounded like an excuse.

“I don’t know what to say … Foodora was always proud and boasting about how fast it was growing,” he said.