Food delivery firms in Australia under threat amid push to improve rights of riders

SYDNEY - During Australia’s regular Covid-19 lockdowns, the deserted streets were suddenly taken over by motorcycle riders with the tell-tale logos of food delivery services as orders surged.

It has now been more than a year since the last lockdowns ended, but Australians remain obsessed with food delivery.

More than seven million Australians now use food delivery services at least once every three months, up from 3.6 million before the pandemic, according to market research company Roy Morgan.

Most food outlets – from convenience stores and fast-food diners to high-end restaurants – now offer delivery options. The food delivery industry has grown 52 per cent since 2019 and is now worth A$851 million (S$792 million), according to research company IbisWorld.

But the future of the sector is in doubt after the sudden collapse of a major delivery service, Deliveroo, which had about 14,000 drivers and 12,000 partner restaurants.

Deliveroo went into voluntary administration earlier in November after it was unable to compete with the growing number of delivery services.

The collapse has highlighted the emerging difficulties facing Australia’s food delivery services.

Deliveroo, which is based in Britain, began operations in Australia in 2015. But the company now finds itself up against a growing range of competitors, including Uber Eats, Menulog and DoorDash.

Another major challenge for delivery services in Australia is the nation’s severe workforce shortage.

The country is enjoying low unemployment of just 3.4 per cent – the lowest rate in almost 50 years – which makes it harder to find and keep the armies of riders and drivers that are needed to ensure fast and efficient delivery.

The companies face another looming threat as the ruling Labor Party, which was elected in May, looks to change workplace laws to provide greater rights to food delivery riders and other workers in the so-called gig economy. Many of these workers do not have the right to guaranteed minimum wages, sick leave, holidays and compensation for injuries.

The government is looking to extend the powers of the workplace tribunal, the Fair Work Commission, to cover “employee-like” forms of work such as food delivery. This would allow the tribunal to provide basic rights covering pay, holidays and other entitlements. The changes are expected to be introduced early in 2023.

Federal Workplace Relations Minister Tony Burke has called for food delivery riders to be treated more like traditional employees than as self-employed or independent contractors.

“All too often, gig workers are underpaid and exploited,” he said in a speech in August.

“On a (food delivery) platform, some of the conditions are going to be different. Rostering won’t work in the normal way, but there has to be some minimum standards.”

The major food delivery services, such as Uber, have been moving to give greater rights to their workers and have increasingly supported the need for regulation.

But the changes will likely add to their costs just as growing cost of living pressures in Australia may lead some people to look for cheaper meal alternatives than using delivery services.

The growth of the sector since the pandemic appears to have led to increased public support for the rights of riders. Many Australians have become familiar with the experience of seeing a helmeted rider arrive at their door carrying their piping-hot order.

An expert on work and cities, Associate Professor David Bissell from the University of Melbourne, said food delivery riders deserve more rights, especially as they are being required to take “risks where other people wouldn’t have to”.

“They’re driving during all kinds of dangerous weather,” he told SBS News. “It’s a hazardous job, and these companies are not sufficiently protecting them.”