Food-delivery app Foodora announces exit from Canada two months after historic worker win

App-based food-delivery giant Foodora is shuttering its Canadian operations, citing the "highly competitive and saturated Canadian environment" in an email sent to couriers Monday.

The rapid exit from the market is expected to be finalized within two weeks. It comes two months after a precedent-setting decision by the province's labour relations board, which ruled the delivery service's couriers had the right to unionize.

"Foodora will continue to operate for the next two weeks. The last day of operations will be May 11, 2020. You should expect to receive an official notice of termination letter today," the email said. "We appreciate this may be difficult news. This is a sad day for all of us."

While the company's couriers had not yet joined a union, they were the first app-based workforce in the country to make significant strides toward it. In February, they scored a historic victory when the board made the first decision of its kind on the gig economy, ruling that Foodora couriers had been misclassified as independent contractors, a category of worker that cannot unionize.

That moved couriers and their prospective representatives, the Canadian Union of Postal Workers (CUPW), into the next round of legal wrangling with the company - including counting union vote ballots that were cast last year but never unsealed.

Now, Foodora's abrupt exit from the country effectively ends the union drive.

"We are immensely proud of what we built together over the last five years," the company's email to couriers said.

"Foodora has turned into a popular name, known to offer a great service and with a delivery experience that gained our customers' trust. However, we have not been able to grow our business into a leading position in the highly competitive and saturated Canadian environment."

Foodora entered the Canadian food-delivery market in 2015 when it purchased local startup Hurrier. Foodora's parent company - Delivery Hero - is based in Berlin and made two billion dollars in revenue in 2019.

The company's couriers had long raised issues of low wages and safety risks - concerns that were amplified by the COVID-19 pandemic. As previously reported by the Star, couriers said they were given no protective gear despite being on the front lines of the crisis.

At the outset of the pandemic, Foodora placed weekly caps on hours for couriers to ensure there was enough work to go around amid fluctuating demand. While the company's email announcing its closure cites economic concerns, last week it sent an email to riders saying it was removing the hours cap because customer demand had "steadily increased."

Monday's email said the company's main priority as it closes down is to "minimize the impact of this decision on Foodora's customers, partners, suppliers and, most importantly, our employees and riders."