‘Not an insignificant ripple’: Thousands of Aussies to lose their job in November

The closure of fast food delivery giant Menulog could leave up to 10,000 Australians unemployed as fears grow that the decision will have far-reaching consequences across the service sector.

In a shock announcement on Wednesday, Menulog said it was leaving Australia after nearly 20 years in the industry.

The last day Australians will be able to get takeaways via the Menulog app will be midnight on Wednesday 26 November.

Parent company Just Eat Takeaway said the loss of around 120 workers’ jobs was a “strategic decision”.

TWU national secretary Michael Kaine told NewsWire that figure was “misleading” and that close to 10,000 Australians were affected by the move.

“We think there are over 10,000 workers accessing work through the Menulog app over time, and about 5,000 people at a time,” Mr. Kaine said.

“So this is going to impact thousands and thousands of workers because they are now going to have to find income elsewhere or provide additional income, so this is not a trivial fluctuation in the economy.”

Mr. Kaine said Menulog’s closure was a “warning shot” for the industry because it was the latest in a long line of delivery service apps to shut down in recent years.

What went wrong?

Menulog said in a statement that it had “overcome challenging circumstances” and that the closure of the Australian market would allow its parent company Just Eat to focus on “accelerating growth and investment in other markets”.

According to IBIS World, Menulog is the second-largest player in the Australian food delivery industry, with a 24 per cent market share in 2024, while the business generated $244 million in revenue during the period.

University of Sydney senior lecturer Alex Veen told NewsWire that increasing competition from the likes of Uber and DoorDash, as well as operating a different employment model, was hurting Menulog.

“What the organization has done differently from others is it has tried to position itself as a ‘better’ platform, especially in terms of competitiveness for work,” Dr Veen said.

“A few years ago, Menulog, with the support of their parent company, Just Eat, fully moved to move from this independent contracting model to an employment model, and they invested quite a bit in that.”

Menulog used a slightly different model than the others; initially as a two-sided marketplace that allowed people to order from restaurants that may have used their own delivery staff, it then moved to a three-sided marketplace model like its rivals.

This means the app acts as an intermediary between consumers, restaurants, and couriers working as independent contractors.

Menulog was relatively slow to transition to a three-party model and was trying to catch up with Uber.

While Menulog was an early adopter of moving these independent contractors to staff, the closure of loophole laws sensationally hurt the business.

As part of sweeping changes, the Australian government announced the Closing the Gap Act in 2023, which includes sweeping reforms designed to transform industrial relations.

These included setting minimum standards for workers in the gig economy and road transport, as well as redefining casual workers, criminalizing wage theft, same-work-same-pay laws and “right to disconnect” laws.

“What we have seen is that some regulatory developments in Australia, particularly the Albanian Labor government’s closure of the loophole bill, have thwarted this initiative,” Dr Veen said.

“This legitimized the platform business model operated by Uber Eats worldwide, while Menulog invested heavily in gradually transitioning to an employment model that they felt was quite difficult to operate.”

Asked whether Menulog was being punished for doing the right thing, Mr. Kaine said the change came too late to help Menulog.

“What we really need is a level playing field in this sector,” he said.

“What this means is that companies will level the playing field, instead of engaging in this ongoing fierce battle of challenging each other for market share by reducing the amounts they pay workers and restaurants.

“This is what Menulog desired, but it was not delivered in time.”

Mr Kaine said closing the loophole legislation allowed the Fair Work Commission to investigate the “lack of standards” for the gig economy.

“That’s a really significant portion of the costs for these businesses; on any transportation job, labor is somewhere between 30 and 50 percent of the cost,” Mr. Kaine said.

“If there is a free-for-all and no regulation, that means companies compete on the basis of squeezing workers as much as they can.

“Not only is this unfair to workers, it can also be fatal, as 17 workers have lost their lives in recent years because the work was inherently dangerous.”

What will it mean for workers?

The closure of Menulog means 120 Australians will directly lose their jobs.

The food delivery service said “all affected employees will be fully supported with generous redundancy packages beyond the statutory requirements and redundancy support.”

They also say there will be a two-week transition period before the app closes on November 26.

Menulog said eligible couriers will be eligible to receive four weeks of voluntary pay.

Eligible couriers who completed their first delivery at least six months before today’s announcement and have made a successful delivery within the last eight weeks will also be eligible to receive payments.

The total number of eligible couriers has not yet been determined.

“This is a company that has shown good intentions over time, and I think it shows that on the way out,” Mr. Kaine said.

“Of course we’ll hold them to that… I mean, it’s certainly not legally required, but it’s a decision that Menulog made and I think they want to leave on the best terms possible.”