Deliveroo Australia CEO Ed McManus on why management pulled pin

Former employees will have a higher priority in the administrative process than drivers, who are contractors and are considered “unsecured creditors”.

Deliveroo Australia staff received an advance compensation payment before closing operations, while all riders who delivered in the last three months received two weeks’ worth of pay.

As part of the voluntary administration process, Deliveroo will put forward a Deed of Company Arrangement (DOCA), a proposal that sets out how the company’s affairs and assets will be dealt with. KordaMentha will review the DOCA and provide a report containing a recommendation on whether to accept the DOCA prior to the second lender’s report in December.

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In a document to creditors seen by this masthead, Deliveroo revealed further details about how it intends to pay employees, riders and restaurant partners.

Former employees are eligible to receive a second severance package including statutory redundancy pay, even if they have worked for less than a year at Deliveroo, as well as a prorated company bonus.

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Under the DOCA, riders are eligible to receive a second payment equal to two weeks’ pay, while restaurant partners who have partnered exclusively with Deliveroo are also paid.

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However, riders and restaurant partners will not receive this second tranche of payments if more than 50 per cent of creditors vote to reject Deliveroo’s proposal at the second meeting in December.

“If the DOCA is not approved, riders [and restaurant partners] will not receive this payment,” said Deliveroo’s letter to creditors signed by Deliveroo’s chief people officer, Caleb Merkl.

Meanwhile, customers with unused credit or unredeemed gift cards will also receive a full refund, pending DOCA approval.

McManus urged creditors to approve the proposal.

“If DOCA passes, it means that employees, who are about to receive your first payment, will get your second payment faster at the end of December. For riders, this means you will receive the second half of the four-week compensation package you were offered,” McManus said.

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Deliveroo has pulled out of Australia, leaving Uber, DoorDash and Menulog behind.

Deliveroo has pulled out of Australia, leaving Uber, DoorDash and Menulog behind.Credits:Steven Siewert

“For our eligible restaurant and grocery partners, and for eligible customers, this means you’ll receive the compensation you’re owed.”

Deliveroo’s collapse follows a string of failed grocery delivery startups, including Send, Voly, and Quicko. DoorDash recently announced its own grocery delivery service, DashMart, in Sydney, Melbourne, and Brisbane.

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