UK food delivery service Deliveroo has shut down its business in Australia.

The company said that it had placed the Australian unit into voluntary administration, with KordaMentha appointed as administrators.

The company attributed the exit to "challenging economic conditions" and has immediately ceased operating in a competitive market which features rivals such as Uber Eats, Menulog (AKA JustEat in the UK and Ireland), HungryPanda and DoorDash.

The company in a statement said that “achieving a sustainable position of leadership in the market is not possible without a disproportionate level of investment which would have highly uncertain returns.”

Eric French, chief operating officer of Deliveroo, said: "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. Our focus is now on making sure our employees, riders and partners are supported throughout this process."

Deliveroo said that customer account information would be available for up to six months, though customers are faced with an error message if they try to place an order.

The news comes a little over a year and a half after Deliveroo lost a Fair Work Commission case for sacking a rider for being too slow during the height of the Covid-19 pandemic. This case was overturned in August 2022, but the intervening months have seen governments across Australia introduce legislation to regulate the gig economy.

Earlier this year, the Transport Workers' Union and Uber reached a landmark agreement on proposed employment standards and benefits. This will see the pair support the creation of a new independent regulatory body which will create standards for rideshare and food delivery gig workers in Australia.

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