Menulog shuts down Australian operations over ‘challenging circumstances’, 120 jobs lost

Food delivery giant Menulog has announced its shock exit from Australia after its attempt to create better working conditions for drivers backfired dramatically.

Food delivery giant Menulog will exit Australia after nearly 20 years, after an attempt to create better working conditions sensationally backfired on the company.

On Wednesday, Menulog announced it was leaving Australian shores, with 120 contracted staff and thousands of gig economy workers impacted by the decision.

University of Sydney senior lecturer Alex Veen told NewsWire a combination of increased competition from the likes of Uber and DoorDash, as well running a different employment model hurt Menulog.

Katy Perry in the menulog ad. Picture Supplied

“What the organisation did differently to some of the others, it tried to position itself as a ‘better’ platform especially in terms of its working competition,” Dr Veen said.

“A few years ago Menulog fully went in – backed by its parent company Just Eat – to move away from this independent contract model to an employment model and they betted quite heavily on that.”

However, changes to employment laws sensationally hurt Menulog.

“What we’ve seen is that its initiative was overtaken by some of the regulatory developments here in Australia, particularly by the Albanese Labor government’s closing the loophole bill,” Dr Veen said.

“That has legitimised the platform business model being run by the Uber Eats of the world while Menulog had heavily betted on shifting gradually towards an employment model, which they found quite difficult to operate.”

Dr Veen was quick to point out this was not the only reason Menulog left Australia.

“All these platforms being multinational enterprises, they’ve all gone through their IPOs and have been increasingly scrutinised in terms of profitability,” he said.

“So Wednesday’s decision has been delivered by corporate decisions overseas … In this case, it is a strategic decision the Just Eat is making as Menulog is outcompeted by Uber Eats and DoorDash.”

Next steps for Aussie-born Menulog

Menulog began in Sydney in 2006 as a digital on-demand platform linking local restaurants to customers before being bought by UK-based Just Eat in 2015.

The closure will impact approximately 120 Australian workers, with customers no longer able to use the service from midnight Wednesday November 26.

Menulog will leave Australia on November 26. Picture: NewsWire / Dylan Coker

All impacted employees will be given a “generous redundancy package” above legal requirements and outplacement support, a spokesman for Just Eat confirmed.

Eligible couriers who have completed their first delivery at least six months prior to today’s announcement and have completed a successful delivery within the last eight weeks are also eligible for payments.

The total number of couriers eligible is yet to be determined.

NewsWire understands payments will be based on average weekly earnings with more information to be provided to eligible couriers in the coming days.

Menulog managing director Morten Belling said it was a tough day for the business and the decision was not taken lightly.

“Our priority now is to support our customers, couriers and partners,” Mr Belling said.

“This is why we are providing everyone a two-week transition period, in which customers can redeem unused vouchers and credits. Additionally, eligible couriers will be entitled to a four-week voluntary payment.”

Snoop Dog starred in one of Menulog’s high-profile ad campaigns in recent years. Picture: Supplied

The Transport Workers Union national secretary Michael Kaine called it a shock for thousands of food delivery riders while calling out previous governments for their lack of laws to protect gig economy workers.

“In the gig economy, workers are still languishing with below-minimum wage rates, no sick leave or superannuation, and deadly pressure to rush to make a living and avoid being deactivated,” Mr Kaine said.

“We are paying the price for Coalition governments’ inaction now, not just with jobs that are exploitative and dangerous, but with less options for customers in an unsustainable industry engaged in a race to the bottom.”

Mr Kaine thanked Menulog for trying to do the right thing for years.

Originally published as Menulog shuts down Australian operations over ‘challenging circumstances’, 120 jobs lost