BERLIN — On Monday, foodora Inc. (subsidiary of Delivery Hero SE) announced the closure of its business in Canada after five years of operation, claiming Canada’s highly saturated market for online food delivery and intensified competition has made it impossible for the company to reach a level of profitability in Canada that’s sustainable enough to continue operations.
“I’m very proud of what foodora has accomplished over the last few years. I’ve been able to witness food delivery grow from its infancy into what it is today and helping to build a brand I’m proud of,” says David Albert, managing director of foodora Canada. “However, there’s been some challenges along the way. We’re faced with strong competition in the Canadian market and operate a business that requires a high volume of transactions to turn a profit. We’ve been unable to get to a position which would allow us to continue to operate without having to continually absorb losses.”
foodora Canada has filed a notice of intention to make a proposal; the details of the proposal have yet to be determined. The business will continue to run until the end of the day on May 11, 2020. foodora Canada’s employees have received their notice today and will continue to be paid as stipulated in their contractual agreements. The rider community has also been given notice period of termination.
“foodora has grown to 10 cities across the country and none of this would have been possible without the dedication of our employees, riders and restaurants. I thank them for the continued support over the last five years. Supporting them during this transition phase is our main priority,” says Albert.
foodora made headlines recently for a high-profile fight with its delivery drivers and riders, who voted to unionize. The company challenged that ruling by arguing its delivery people are not employees but independent contractors. But, on February 26, the Ontario Labour Relations Board ruled couriers working for foodora are, as Foodsters United and the Canadian Union of Postal Workers argued, dependent contractors — which means they have the legal right to organize and certify a union. foodora couriers held a vote in August on whether to join the Canadian Union of Postal Workers, but the results at the time were sealed pending challenges over the employment status of the couriers and whether they were eligible to unionize.
In response to Monday’s announcement, the Canadian Union of Postal Workers (CUPW) and the Foodsters issued a statement that claims the two-weeks’ notice that has been provided is “grossly unfair and unreasonable.”
“We’re currently reviewing our legal options. At this time, however, we want to focus on the hundreds of workers who have just been let go in the middle of a pandemic, with no Record of Employment and unclear access to benefits such as the CERB,” says CUPW national president Jan Simpson.
The statement says although foodora claims its closure is the result of an inability to make larger market gains, riders have long tried to bring positive changes to the company’s attention, “but were ignored every time. That was a major catalyst for the unionization drive. By closing, the company is now again saying it would rather leave hundreds of vulnerable workers without any income than listen to those workers’ suggestions for change.”
“foodora and Delivery Hero must be held accountable to the workers — couriers have made millions for this company and deserve to be treated with dignity and fairness. In the middle of the COVID-19 pandemic, they are considering numbers over human lives,” says Simpson.