Deliveroo AU Has Been Placed into Voluntary Administration, Is Exiting Australian Market and Not Refunding Credits/Gift Cards

dm02 on 16/11/2022 - 16:39
Last edited 16/11/2022 - 18:13 by 1 other user

Just got this email from Deliveroo:

We have today made the sad announcement that we are leaving Australia. This has been a difficult decision to make. We have enjoyed serving you the amazing food that Australia is known for, working with thousands of brilliant restaurants and riders.

Deliveroo, like all other companies, is now doing business in challenging economic conditions, which requires us to take difficult decisions. We always aim to deliver the best possible service for our consumers wherever we operate, and if we cannot do that we will be prepared to review our position.

In Australia, we have concluded that achieving a sustainable position of leadership in the market is not possible without a disproportionate level of investment which would have highly uncertain returns.

On the basis of this decision, Deliveroo Australia has been placed into administration. The director of Deliveroo Australia has appointed Michael Korda, Andrew Knight and Craig Shepard of KordaMentha as voluntary administrators. To find out more, including information for creditors, please visit click here. You will receive further communications from the Administrators shortly.

What this means for you

Deliveroo Australia has ceased operations, meaning you can no longer place orders on Deliveroo in Australia.

You will still be able to access your customer account for up to 6 months from this date onwards. After this period your customer account will be closed. Within this period while your account is open, you can download your customer information.

Thank you for ordering with Deliveroo.

For any further information, please visit the administrators’ website at: https://kordamentha.com/creditors

Notably, Deliveroo is not refunding anyone with account credits or gift cards, and if you have these you are now an unsecured creditor:

https://kordamentha.com/getmedia/282f335e-a43a-4c7c-8162-c8a…

19. I have a credit on my customer account. Will it be refunded?
Customers with credits on their accounts will not be refunded for this amount. Such customers are deemed to be unsecured creditors in the Administration and should submit a Proof of Debt form. Further information on how to lodge a Proof of Debt form will be provided in due course.

26. Will gift cards be honoured?
As the Company ceased trading immediately, gift cards cannot be honoured or refunded. Customers with unexpired/unused gift cards are deemed to be unsecured creditors in the Administration and should submit a Proof of Debt form. Further information on how to lodge a Proof of Debt form will be provided in due course.

I note that Deliveroo plc (the UK-based parent company of Deliveroo Australia Pty Ltd) gave customers from The Netherlands 42 days notice before ending their operations: https://corporate.deliveroo.co.uk/media/deliveroo-announces-…
Seems pretty disgraceful to rug-pull all their Australian customers, employees, contractors and restaurant partners like this when clearly they didn't have to for NL. They should probably take "roo" out of their name..

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Comments

        • CheapBrah on 16/11/2022 - 17:45
          +1

          Just like its not relevant if Harvey Norma knew if they sold you a dud vacuum cleaner, still their responsibility to refund/replace.

        • Koffee on 16/11/2022 - 18:10

          Not how the law works regarding giftcards.

    • Homr on 16/11/2022 - 17:44
      +6

      Shopback are bloody scums. They somehow refused my 15% groupon cashback when I made a $4750 purchase.

      • boozler on 16/11/2022 - 20:41

        @Homr, happened to me as well my take on shopback is that they’ve taken your 15% Cashback and it’s gone into their account , who would know , can anyone prove it. Small purchases/% cashback, no problems paying people their cashback. They are scum as well.

        • Homr on 16/11/2022 - 20:44

          How much $ did you lose Barney?

  • xdivino on 16/11/2022 - 17:37
    +10

    Time to push Gift Card reforms with Politicians and law makers I think.. this would be good fuel for that fire..
    Selling gift cards with this on the horizon is pretty scum

  • Neoika on 16/11/2022 - 17:43
    +1

    Lucky I never use the service.

    Clear your Doordash credits ASAP. Maybe only Ubereats credits is safe to hold onto.

    • I Smell Pennies on 16/11/2022 - 18:15
      +4

      can’t really clear it if you can’t order

    • fishandchips on 17/11/2022 - 10:07

      ubereats will be next, it is chain reaction. I recommend clear all gift card and stop buying gift card.

  • boldwombat on 16/11/2022 - 17:43

    Just had a conversation with chat support. While I think they were wrong, they said that we should be able to place orders and use credits for the next six months. This doesn't match up with other info, but may be worth keeping an eye on.

    • dm02 on 16/11/2022 - 17:44
      +12

      Chat support has no idea then, because the administrators have confirmed that they have ceased all operations

      • Neoika on 16/11/2022 - 17:46

        Shopback still has not turned the Giftcard sale off.

        • dm02 on 16/11/2022 - 17:46

          That's bad .. they probably will by close of business today, hopefully

        • brandogs on 16/11/2022 - 17:47
          +2

          Yes they have?

          • Neoika on 16/11/2022 - 17:47
            +1

            @brandogs: Maybe, I still see the challenge.

            • dm02 on 16/11/2022 - 17:48
              +2

              @Neoika: I've checked as well, the challenge might still be there but they've pulled the gift cards from sale

      • boldwombat on 16/11/2022 - 17:47

        Yes, I thought as much but I didn't want to harrass the chat support. They're probably having a hard enough day.

    • Homr on 16/11/2022 - 17:47

      can u still order??

    • Homr on 16/11/2022 - 17:51
      +2

      They got mixed up with this

      "Customers will still be able to access their accounts and download their customer orders and information for six months."

      • souths123 on 16/11/2022 - 18:10

        but we can't take off the credit card info linked to the account……I just tried

        • Craze on 16/11/2022 - 19:47

          You should be able to? Just cancel deliveroo plus subscription and delete payment info. I just did that.

          • dreamykitten on 16/11/2022 - 19:53

            @Craze: How did you do that? I can’t do it on the app or on the phone browser. Did you do it on desktop?

            In fact I can’t even see I have a Deliveroo Plus subscription on the app and on the phone browser.

    • souths123 on 16/11/2022 - 18:11

      both the website and app are inactive for any orders, so…..

  • arcticmonkey on 16/11/2022 - 17:48
    +2

    I just tried to place an order in the UK and it didn't deduct from my credit balance

    We are screwed

  • iNeed2Pee on 16/11/2022 - 17:51
    +8

    So they are happy to trade in other countries but not provide those current customers who have money still owing anything. So easy to go into administration and wipe your hands these says.

    • Thrawn on 16/11/2022 - 19:04
      +3

      It’s pretty stupid exiting the market this way. Why would restaurants/drivers in the UK trust them now, unless they get paid in advance. It’s a good way to lose their market share worldwide

    • peppet on 16/11/2022 - 20:35

      Exactly. I'm sure they could do the right thing and refund these giftcards if they wanted to.

      And seeing as they ended operations immediately without warning I'd say there was a fair bit of planning and discussion involved while they continued to sell us giftcards.

      • Stopback on 16/11/2022 - 20:54

        Departments don't talk to each othrr

        • peppet on 16/11/2022 - 21:02

          I just mean the "we" from this statement, whoever they are, seems to have discussed something and come to a "conclusion"

          "In Australia, we have concluded that achieving a sustainable position of leadership in the market is not possible without a disproportionate level of investment which would have highly uncertain returns" 

          "Working with the local Australian leadership, the Company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo's risk/reward thresholds."

  • dealsgrabber on 16/11/2022 - 17:54
    +15

    Shopback definately a party to this to make last minute commissions before they go blow up the lid. If not, they should file a case against Deliveroo for coming out with the GC deal. How can a company who knows they are going adminstration in a few days come out with a deal to make as much money as possible by selling GC at discounted rate? Clearly shows what their motive was behind last week's deal.

    • I Smell Pennies on 16/11/2022 - 18:25
      +2

      Bold of you to assume Shopback played a role here. There’s a good enough chance Shopback did not even know and this announcement was news to them just as it was news to us. At the end of the day, they did this effective immediately and we cannot even redeem our credits/GCs. For this reason I’d say they didn’t advise Shopback so they can sell more GCs to us (who are now unsecured creditors and thus have almost no chance in getting our money back)

      • dealsgrabber on 16/11/2022 - 18:56

        I did mention in my comment that if they were not a party to this, they should file a case against Deliveroo for coming out with the GC deal when it was just about to go into administration. Deliveroo's legal team would have been aware they could receive a legal notice from Shopback which is why I believe Shopback might have known about all this.

        • I Smell Pennies on 16/11/2022 - 19:09

          Guess we'll wait and see how this pans out

        • SirCH on 16/11/2022 - 21:50

          What is the point in filing a case against a company that doesn't have enough money to pay its existing debts?

    • samfisher5986 on 16/11/2022 - 19:38
      +1

      What a stupid post, how would shopback know?

      Why would deliveroo tell them anything?

    • peppet on 16/11/2022 - 20:42
      +2

      It seems wiser to not inform ShopBack and get them to promote giftcards to sell as many as possible. I highly doubt SB would knowingly participate in "fraud" and risk their entire business, seeing as many people here are already angry at them without any info yet

      • capslock janitor on 17/11/2022 - 17:56

        highly doubt SB would knowingly participate in "fraud" and risk their entire business,

        i wouldnt put so much faith in them, theyve risked and done dodgy stuff before with astroturfing over their past data leak/hack

  • lonewolf on 16/11/2022 - 17:57
    +5

    Damn was tempted to buy the gift card due to having the Plus for 12 months. Lucky i didnt, feel sorry for everyone who did. Somehow it feels wrong that companies can sell gift cards a week or 2 before this happens. Surely management would have known this was going to happen weeks if not months ahead?

  • Homr on 16/11/2022 - 18:04

    sooooo whos going to deliver KFC orders?

    • SirCH on 16/11/2022 - 21:51

      Doordash, Menulog and Uber Eats drivers

      • fishandchips on 17/11/2022 - 10:08

        They will be the next victims.

  • souths123 on 16/11/2022 - 18:09

    so, how do we get rid of credit card details…can see my account info but the delete button for the credit card is inactive… I have Deliveroo Plus on initial free 12 months, but can't change that now, and can't delete the cc

    • Homr on 16/11/2022 - 18:12

      u can't. Your details will be released to the people on the dark web

    • boldwombat on 16/11/2022 - 18:14

      I cancelled the subscription and deleted my card details in the Android app earlier. It might be worth trying on a different device.

      • souths123 on 16/11/2022 - 18:17
        +1

        thanks, I couldn't do it on the website as the delete button wouldn't work, but did it through the app after cancelling my Plus subscription

  • zooter on 16/11/2022 - 18:11
    +1

    so what gift cards are safe to hold (not 1000s, but 100s)

    Shopback Superswap?
    Amazon?
    Coles?
    Woolies?
    Prezee?
    Ampol?

    Luckily i'm not a big gift card hoarder but OZB has a lot of deals on gift cards, so would be good to understand which ones are "relatively safe"

    • CheapBrah on 16/11/2022 - 18:13
      +1

      Shopback could go under so no superswap not safe. Same with Prezee. Others should be safe.

      • fishandchips on 17/11/2022 - 10:09

        None of them will be safe.

  • Drakesy on 16/11/2022 - 18:12
    +2

    Lol

  • Koffee on 16/11/2022 - 18:12

    I'm not surprised. I had an order from a restaurant rejected recently - the same restaurant who was open on Menulog and Uber and who seemed to regularly not take orders on Deliveroo. It was like the canary in a coalmine…

  • johnwinkle on 16/11/2022 - 18:15

    hows doordash financials compared to them

    • skido on 16/11/2022 - 18:20
      -1

      considering doordash’s 3x $15 referral promo, multiple free food glitches, customer service blindly compensating customers without requesting for proof… id say they’re likely to be next. menulog is likely also on the line, considering they've been giving out multiple $5/7/10 and free delivery vouchers..

      • Homr on 16/11/2022 - 21:22

        hope menulog stays hangs around and be the last to go. I enjoy @skd100™ post everyday

      • Brick Tamland on 17/11/2022 - 16:01

        When they first opened they had that deal if you didn't get delivery with 30 mins you got a voucher for the next meal. I always ordered when there was peak hour traffic and always got the voucher, that promo didn't last long.

        • Jake17 on 17/11/2022 - 19:22

          Do you mean when they first started using their own drivers for some restaurants? Because they cant track the time it takes restaurants to deliver

          • Brick Tamland on 17/11/2022 - 19:46

            @Jake17: Yeah maybe, it was at launch of the brand.

            • Jake17 on 17/11/2022 - 19:47

              @Brick Tamland: At launch it was only restaurants that delivered themselves. Then they started using couriers after the other companies started up here.

  • arcticmonkey on 16/11/2022 - 18:16

    ShopBack have an option on their chat bot about Deliveroo

    Given how much they have promoted Deliveroo, hopefully they will refund us

  • whey4000 on 16/11/2022 - 18:19
    +5

    Do we need to cancel our Deliveroo Plus subscriptions we got for free so we are not charged 12 months from now or will this be automatically done.

    • boldwombat on 16/11/2022 - 18:38
      +1

      I cancelled for peace of mind. They're obviously pretty far from trustworthy.

      • whey4000 on 16/11/2022 - 18:38

        What did they say

        • boldwombat on 16/11/2022 - 18:39

          No need to contact support, you can cancel and remove card details in the app.

  • happydude on 16/11/2022 - 18:24
    +1

    There is a full statement from Deliveroo PLC:

    Deliveroo is today announcing that it has decided to end its operations in Australia. This decision is driven by the Company's disciplined approach to capital allocation. Management is committed to driving growth and delivering on its path to profitability while aiming to have strong, profitable businesses in each of the markets in which it operates, built on the foundation of leading hyperlocal market positions.

    In Australia, the market is highly competitive with four global players, and Deliveroo does not hold a broad base of strong local positions. In H1 2022, the Australian business represented approximately 3% of Deliveroo's total Gross Transaction Value (GTV) and negatively impacted the Company's adjusted EBITDA margin (as % of GTV) by approximately 30 basis points.

    Working with the local Australian leadership, the Company has determined that it cannot reach a sustainable and profitable scale in Australia without considerable financial investment, and the expected return on such investment is not commensurate with Deliveroo's risk/reward thresholds.

    Given this position, Deliveroo has decided to end its operations in Australia. The Company's subsidiary in Australia, Deliveroo Australia Pty Limited (DAPL), has therefore been placed into voluntary administration by its Director and will permanently cease trading imminently. Michael Korda, Andrew Knight and Craig Shepard of KordaMentha have been appointed as voluntary administrators of DAPL.

    As part of the administration process, Deliveroo Australia will put forward a Deed of Company Arrangement to the administrators in due course setting out the appropriate compensation packages it intends to provide for its creditors. This includes guaranteed enhanced severance payments for employees as well as compensation for riders and for certain restaurant partners.

    As reported in the Q3 2022 trading update on 21 October, throughout 2022 Deliveroo has been adapting financially to the operating environment and driving forward on the path to profitability. Following today's announcement, there is no change to Deliveroo's previously-communicated financial guidance on GTV growth and adjusted EBITDA margin for 2022 and beyond.

    Eric French, Chief Operating Officer, said:

    "This was a difficult decision and not one we have taken lightly. We want to thank all our employees, consumers, riders and restaurant and grocery partners who have been involved with the Australian operations over the past seven years. Our focus is now on making sure our employees, riders and partners are supported throughout this process."

    • happydude on 16/11/2022 - 18:26
      +1

      In short, they aren't being total dicks about it. They will sort out riders and "certain" restaurants. Nothing about Gift Cards.

      • Smallman on 16/11/2022 - 18:31

        No, we ( Consumer) are gonna pay money to riders and certain restaurants

      • star-ggg on 17/11/2022 - 08:13

        In short, they had planned for this months ahead since the forecast financials didn't change

      • the wiz on 17/11/2022 - 14:39

        It actually looks like they are being total dicks.

        I was willing to be gentle. But this statement contradicts what others have said here (possibly even you IIRC) about Deliveroo going broke without warning and having a legal requirement to call in the administrators to avoid trading insolvent.

        So they've been selling discounted GCs that they'd never have to honour right up until:

        Deliveroo is today announcing that it has decided to end its operations in Australia. This decision is driven by the Company's disciplined approach to capital allocation.

        Robbing Peter to pay Paul isn't "discipline". Total dicks.

    • samfisher5986 on 16/11/2022 - 19:47
      +3

      So basically gift cards are going to pay for employees.

  • jellykingdom on 16/11/2022 - 18:31

    Luckily i just used up my credits recently. Now im DEFINITELY going to use up my Doordash credit this week. I figure Uber is more stable

    • freestyle18 on 16/11/2022 - 19:20

      uber is loss making. I wouldn't consider them more stable. just bigger

      • jellykingdom on 16/11/2022 - 19:20

        Yes i know they dont make any money but they're borderline Too Big To Fail at this ppint

  • arcticmonkey on 16/11/2022 - 18:34
    -1

    https://kordamentha.com/creditors/deliveroo-australia-pty-lt…

    1. I have a credit on my customer account. Will it be refunded?
      Customers with credits on their accounts will not be refunded for this amount. Such customers are deemed to be
      unsecured creditors in the Administration and should submit a Proof of Debt form. Further information on how to lodge a
      Proof of Debt form will be provided in due course.
  • berry580 on 16/11/2022 - 18:36
    +1

    All 3rd party food delivery app deserve the same fate. Truth be told, they add negligible value to the market overall.

  • Joshminey on 16/11/2022 - 18:42

    I had 50 bucks in account credit and 46 bucks unpaid for delivering for them rip

    • boldwombat on 16/11/2022 - 18:47

      According to comments above, it looks like you should at least get paid the $46.

    • Homr on 16/11/2022 - 20:57

      Were you paid an hourly wage or per delivery?

  • Mcuser on 16/11/2022 - 18:47
    +3

    Lol who buys deliverwhooo gift cards

    • Drpepper666 on 16/11/2022 - 23:39
      +4

      Ozbargainers "saving" 5-10% loading up hundreds of dollars to then buy +40% marked up delivery food

  • jackking on 16/11/2022 - 18:47
    +10

    Even though I did not buy any, this pisses me off. You all should report to ASIC and ACCC and let them know about this. Directors of the company could be held responsible if they borrowed knowing they were closing the shop. At the very least parent company should make consumers whole. Even virgin didn't cease the flight credit people had, though slightly diff circumstances as it would be fulfilled by new owners of the business.

    I worked in restructuring before and payment to the unsecured creditors is anywhere from 0c to $1 but in my experience rarely above 20-30c. Doubt they have much or any hard assets to sell and can't sell IP as its UK company. Given that shopback deal was posted like 5 days ago, the Deliveroo AUS board and Mgmt def knew what was happening and what they were doing. Given Korda Mentha's reputation in the market (referred to as vultures who made >$50m from feeding on Ansett), I will not be surprised if they came up with the idea. Their fees (charged hourly) are paid even above secured debt and their team culture is to log as many hours as possible to eat away the money pool for creditors so often unsecured creditors are left with very little.

    I hope they didn't have much senior debt and will make you guys whole. Pretty sure they are quitting due to gig classification of workers as employees. Disgusting to not even give notice. Hope there is a class action or fines to the directors given the consumer angle on this

    • happydude on 16/11/2022 - 18:53
      +1

      There was 1 director for the AU operations. The parent turned off the money tap but will offer a DOCA. Going after a lowly director won't get anyone anywhere.

      There was 600 odd clicks on that shop back deal. At most they would have sold $200k worth I reckon. Pretty standard promo.

      • blah-blah on 16/11/2022 - 18:57
        +1

        I think the clicks not as much of an indicator for shopback gift card deals, since can only buy in the app so most people may not click through from OzB.

      • jackking on 16/11/2022 - 21:15
        +6

        My issue with Deliveroo is why did they promote heavily discounted gift cards if the senior mgmt knew they were going to close. They will argue they did not know or were not sure. Having worked in the industry what I can guarantee is some people (often senior mgmt) def knew talks had begin about closing Aus and they should have made sure to not sell highly discounted gift cards. I am not an expert but the usual good discount for gift cards is like 10-15%. 20% drew a lot of people to the offer and I feel like the move had bad intentions and basically robbed people. If they make people who have the credit whole then I am fine with them closing shop. Employees will get a redundancy package and in a worst case covered by the fair employment entitlements act if the company can't pay them. Its the customers who truly suffer here (and maybe drivers but they can just switch to UberEats or Doordash). The fact that they promoted discounted gift cards 5 days ago doesn't fly well with me.

    • Homr on 16/11/2022 - 20:02

      What is Korda Mentha's reputation in the market? Please enlighten us

      • jackking on 16/11/2022 - 21:08
        +1

        It is pretty bad imo. They just log lot of hours and milk the administration process. The firm started because it managed bankruptcy for failed airline companies and earned over $50m because they took it to liquidation. Apparently it was the second most profitable administration in the world! The process for many years. I am sure Deliveroo one will not take that long but yeah not the best administrator. Also, creditors are allowed to change their VA administrator on the first meeting, so if senior lenders/ or majority lenders want to change you can do so (people don't often contest).

        • Homr on 16/11/2022 - 21:12
          +1

          Where can I learn more about administrators and how they play the business game? I'm really inspired by this administration process

          Also, are Deloitte good administrators? I hear their name alot when company collapses. Are administrator also accountants?

          • jackking on 16/11/2022 - 21:22
            +1

            @Homr: Lol if you are so interested, you can read 439A reports available online. They pretty much summarise everything. Deloitte is good but one of their main guys Vaughn S left for FTI Consulting. He was the one who worked on Virgin. Other firms are McGrath Nicole and EY and KPMG who acquired similar firms to Korda past few yrs. I found the work pretty boring, corp finance is way more interesting and pays way more. But if you don't mind the work, partners in Restructruing make bank because once you win a gig (like Oroton/Colette), you are guaranteed to make $4-5m.

            • Homr on 16/11/2022 - 22:12

              @jackking: How does administrators make money from companies that no longer have any money? Isn't that why they called the administrators in the first place?

              • capslock on 16/11/2022 - 22:14
                +1

                @Homr: Administrators get paid before anyone else. They won't take the job if there is zero money available.

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