Restaurant and cafe owners have urged Australians to boycott delivery platforms like UberEats, as many switch to an in-house delivery service after Deliveroo ended.
Owners have criticized delivery applications for constant service issues and a lack of corporate support.
Deliveroo abruptly closed its doors on Wednesday, leaving thousands of workers out of work, further cementing UberEats’ market dominance.
The company claimed poor profits and an increasingly competitive market against Uber Eats, Menulog, DoorDash and Takeaway.com were behind the sudden closure.
Australian business owners have urged customers to stop using third-party delivery apps like Uber Eats and Menulog because many outlets don’t offer “real support” (stock image).
Chris Lucas, who owns Melbourne hospitality group Lucas Restaurants, said he was done with third-party apps due to ongoing service issues.
“We’ve never really been satisfied with the level of service we receive,” he told the Today Show.
“We’ve always had a lot of problems, groceries not delivered, you know, drivers who didn’t pick up on time and it was a very problematic service and at the end of the day it certainly wasn’t profitable for us and we always found it very difficult to deal with these multinationals companies to work together.’
The restaurateur said the third-party delivery services are “not Australian” owned and he doesn’t feel they have “real brand ownership”.
Mr. Lucas now only uses an in-house delivery service for his restaurants and takeaways and felt using third-party suppliers was “not worth the headache”.
“For us it was a logical decision to just cut all connections to all delivery apps as we really have had so many complaints from all our customers over the last few years,” he said.
The business owner added that he says the same companies “really took advantage of the situation” and offered “no real support” during the Covid lockdown when there were glaring issues with drivers, deliveries or transactions with customers.
“I never really left that time to myself and thought that we had real partners there who would support us in good times and bad,” he said.
Its restaurants and takeaways, including Baby Pizza and Hawker Hall, have been removed from all delivery apps.
Chin Chin, which serves Southeast Asian cuisine and has restaurants in Sydney and Melbourne, was removed from the apps last year.
Melbourne restaurateur Chris Lucas (pictured), who owns Lucas Restaurants, has slammed outside delivery companies, saying he’s done with them over constant service issues
Mr Lucas described third-party apps as a “very problematic service” and said he would now only use an in-house delivery service for his restaurants and takeaways (stock image).
Deliveroo announced on Wednesday that it had ceased all activity in Australia and entered voluntary administration.
The decision affects 14,000 restaurants, 14,000 drivers and 150 employees.
Financial documents show the company has been placed under receivership and KordaMentha Restructuring has been hired to take over the business.
Administrators Craig Shephard, Michael Korda and Andrew Knight will either sell Deliveroo to a new owner or liquidate it and sell it for parts.
It was not immediately known how much debt Deliveroo’s Australian arm was in and who would lose money it owned.
Opening the app, which usually shows a list of restaurants, is just a bug telling customers there is a problem and trying again later
Deliveroo told customers withdrawing from Australia was a “difficult decision” but it was “doing business in difficult economic conditions”.
“We’re always striving to provide the best possible service to our consumers wherever we operate, and if we don’t succeed in that, we’re willing to reconsider our position,” he said.
‘In Australia we have concluded that it is not possible to achieve sustained market leadership without disproportionate levels of investment that would entail highly uncertain returns.’
In a separate announcement to investors, it explained that Deliveroo is simply lagging too far behind these market leaders and would cost too much to catch up.
“The company has determined that it cannot achieve sustainable and profitable size in Australia without significant financial investment,” it said.
“The expected return on such an investment does not meet Deliveroo’s risk-reward thresholds.
According to IBISWorld data, Deliveroo had just 11.7 percent of Australia’s grocery delivery market late last year, behind the dominant market leader UberEats at 52.9 percent and MenuLog at 19 percent.
According to IBISWorld data, Deliveroo had just 11.7 percent of Australia’s grocery delivery market late last year, behind the dominant market leader UberEats at 52.9 percent and MenuLog at 19 percent
“In Australia, the market is very competitive with four global players and Deliveroo does not have a broad base of strong local positions,” Deliveroo said.
The UK-headquartered global company said its Australian business accounted for just 3 percent of its total sales and weighed on its profit.
‘[Australia] negatively impacted the company’s Adjusted EBITDA margin (as a percentage of gross transaction value) by approximately 30 basis points,’ it said.
Deliveroo has around 6,500 employees and drivers in Australia and would provide “guaranteed increased employee benefits, as well as compensation for drivers and certain restaurant partners”.
Business has boomed for all players in the market during the pandemic as Australians have been stuck indoors during lockdown and restaurants have only been able to offer delivery and take away.
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