Foodora to cease Canadian operations in May
Posted April 27, 2020 2:57 pm.
Last Updated April 28, 2020 6:55 am.
Food and alcohol delivery app Foodora says it will be leaving Canada next month.
The Berlin-based company announced Monday that it has not been able to make enough profits and can no longer sustain operations in the country.
Along with takeout food deliveries, Foodora also offered same-day delivery for LCBO orders.
It says the decision was made in part because it was competing against strong rivals and operating in a highly saturated market for online food delivery
Foodora says it was unable to get to a position that would allow it to continue to operate without having to continually absorb losses, and so it filed a notice of intention.
Foodora says it provided its Canadian workers with notice of the change and is working on devising a proposal to provide additional recovery to employees and other creditors.
The business operated in 10 Canadian cities over the last five years and had racked up 3,000 restaurants on the platform.
It plans to cease Canadian operations at the end of day on May 11.
Meanwhile, restaurants struggling to survive during the COVID-19 crisis have turned to take-out and delivery, but some say the commission fees charged by food-delivery companies including Uber Eats, Door-Dash and Skip-The-Dishes are eating away at their bottom line.
Restaurants Canada’s Mark von Schellwitz says dine-in service accounts for the majority of the industry’s revenue and margins are slim at the best of times.
He says appreciates the role third-party delivery companies play in keeping businesses operating during the pandemic, but fees of up to 30 per cent mean most can’t turn a profit.