What happened: On-demand food-delivery service Foodora Inc. is closing its business operations in Canada after May 11.
Why it matters: The company, headquartered in Berlin, blames Canada's highly saturated food-delivery market for its inability to sustain operations. It did not mention whether the COVID-19 pandemic was a factor.
Vancouverites won't see bright pink food-delivery backpacks biking around the city after May 11.
Foodora Inc., which operates in 10 Canadian cities, announced Monday it intends to curb its food delivery business next month after five years of operations.
The Berlin-based company – a subsidiary of Delivery Hero SE – cited Canada's highly saturated food delivery market and strong competition as reasons for its decision.
"We're faced with strong competition in the Canadian market, and operate a business that requires a high volume of transactions to turn a profit. We've been unable to get to a position which would allow us to continue to operate without having to continually absorb losses," stated Foodora Canada managing director David Albert in a news release.
The company says its Canadian employees were given their notice today, and cyclists who deliver food for Foodora Canada have been notified.
The company has also filed a notice of intention to make a proposal – a procedure under Canadian bankruptcy and insolvency legislation. Filing the notice gives a company 30 days to make a proposal to its creditors, or request an extension. If the 30-day deadline passes and neither has occurred, the filing company is considered bankrupt.
In its announcement on Monday, Foodora Canada said it is working on a proposal to provide "additional recovery to employees and other creditors."
