Foodora is going bankrupt and owes restaurants and creditors in Canada almost $5 million
Foodora's swift and unexpected exit from Canada is causing a lot of issues — and it's not just because you can't order your favourite burrito anymore.
The app-based food delivery service is initiating bankruptcy proceedings in Canada, and it's leaving behind just over $4.7 million in debt that it doesn't plan to pay back to its creditors including many small businesses and restaurants.
After 5 years of serving Canadians, we’re sorry to say that we’re closing our doors. 🤍 Our last day will be May 11, 2020. It’s been an incredible ride, we’d like to thank our riders, restaurant partners, and customers for the support over the years. 💖 #foodora pic.twitter.com/1fragGI16c— foodora_ca (@foodora_ca) April 28, 2020
Foodora has listed close to 1,300 restaurants that it delivers for as "creditors," which means that they're owed money, goods or services.
Since Foodora is now unable to pay that debt, the company's remaining money will be distributed among creditors in bankruptcy proceedings — but it's highly unlikely that the money will amount to $5 million.
And with 75 per cent of Canadian restaurants admitting that they're very concerned about their current level of debt, most can't afford to take a financial hit right now.
But it's not just restaurants that are upset with Foodora; the company is also under fire from the Canadian Union of Postal Workers, who were seeking to represent the company's food couriers.
"Delivery Hero & Foodora made lots of money in this country on the backs of the couriers’ hard work in treacherous conditions, and these couriers don’t deserve to be abandoned in the uncertainty of a pandemic. They have rights and we’ll stand up for them.” #Justice4Couriers https://t.co/4X285RLRcU— FoodstersUnited (@FoodstersUnited) April 29, 2020
CUPW is alleging that Foodora is closing down in Canada to "defeat a union organizing drive" from its employees, which would violate Ontario labour laws if true.
Jan Simpson, National President of CUPW, said, "Foodora may try to cut and run, but they can't hide from their responsibilities."
"Foodora made lots of money in this country on the backs of the couriers' hard work in treacherous conditions, and these couriers don't deserve to be abandoned in the uncertainty of a pandemic."
Some of the restaurants Foodora owes money to include Bellwoods Brewery ($3,192.65), Blondie's Pizza ($1,921.15) and Fresh Restaurants ($7,573.78) in Toronto , Aux Vivres ($3,118.63), Frite Alors ($3,181.16) and La Banquise ($8,580.55) in Montreal, Japadog ($638.64), Juke Fried Chicken ($3,396.62) and Jinya Ramen ($1,512.37) in Vancouver.
Some other notable restaurants include:
Foodora will cease operations in Canada on May 11.
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