Foodora Canada closing amid ‘highly saturated market’ and ‘intensified competition’

Click to play video: 'Foodora stopping Canadian operations mid-May' Foodora stopping Canadian operations mid-May
WATCH ABOVE: Food delivery service, Foodora, will be stopping operations in Canada come mid-May. As Erica Vella reports, the company’s closing is because of highly saturated market around food delivery apps and intensified competition. (April 27, 2020) – Apr 27, 2020

Foodora is ceasing operations across Canada next month due to a competitive online food delivery market, according to a statement from the company.

“Canada is a highly saturated market for online food delivery and has lately seen intensified competition,” company officials said on Monday.

“Foodora has unfortunately not been able to reach a strong leadership position and has been unable to reach a level of profitability in Canada that’s sustainable enough to continue operations.”

READ MORE: Ontario labour board rules Foodora couriers are dependent contractors, eligible for union

The company is set to stop operating on May 11.

The announcement also comes after the Ontario Labour Relations Board ruled in February that couriers are “dependent contractors” and therefore could unionize.

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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.

READ MORE: Hearing on Foodora union gets underway at labour board in Toronto

The company said the employees were notified of the announcement earlier in the day and will be paid as required under the contracts.

The statement said Foodora Canada is “putting together a proposal to provide additional recovery to employees and other creditors,” but the details surrounding the proposal weren’t announced as those have yet to be determined.

Founded in 2015, the company said it worked with 3,000 restaurants in 10 Canadian cities.

— With files from The Canadian Press

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