Deliveroo’s Australian exit raises need to modernise food delivery

Deliveroo recently announced it will stop operations in Australia. 

Deliveroo’s move to exit the Australian market sheds light on the need to modernise the food delivery sector, GlobalData reported. 

“Deliveroo’s decision to leave Australia is a dramatic move, but is based on an all-too-familiar story for delivery aggregators,” Hannah Cleland, Foodservice Analyst, GlobalData, said. 

“Since the pandemic, the sector has been plagued by driver shortages, tightening gig work regulations, and now more than ever increased inflationary pressures such as rising fuel costs.”

Read more: Deliveroo exits ‘highly competitive’ Australian market 

Despite these challenges, Global Data found consumer demand remained high at 64% globally. 

“A focus on a more modern and sustainable way of covering ‘last mile’ delivery can provide some solutions to the challenges faced by the food delivery sector,” Cleland said.

“Cyclist couriers, for instance, will help alleviate fuel cost pressures, while drone delivery is an attractive alternative in the face of an industry labor shortage.” 

Deliveroo’s decision to leave the market was driven by the highly competitive market, and its lack of strong local position.