Menulog Exits Australia
Food delivery company Menulog has announced it will be ceasing Australian operations at the end of November, leaving Uber to further dominate the market.
Founded in Sydney in 2006, Menulog became Australia’s second-largest food delivery platform. This week, Menulog informed customers of the closure via email as well as a statement from managing director Morton Belling.
“Today is a tough day for the Menulog business, and I would like to reassure everyone this decision was not taken lightly,” the statement reads.
“Our priority now is to support our customers, couriers and partners. This is why we are providing everyone a two-week transition period, in which customers can redeem unused vouchers and credits. Additionally, eligible couriers will be entitled to a 4-week voluntary payment.
“The Menulog platform will remain active until Wednesday November 26 at 23:59 AEDT. We would like to sincerely thank everyone who has partnered and supported Menulog over the years.”
The statement also said Menulog had been “navigating challenging circumstances” and its local closure would allow it to “focus on accelerating growth and investments in other markets.”
Despite consumer demand, the company experienced a significant downturn in market share, decreasing from 80 per cent in 2014 to less than 25 per cent. Declining revenue coupled with high operating costs, such as advertising campaigns starring high-profile celebrities like Snoop Dogg and Katy Perry, contributed to Menulog’s demise.
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An Australian-born company, Menulog was bought in 2015 by UK-based Just Eat, which was folded into Dutch-based Just Eat Takeaway.com following its acquisition in 2020. The Australian exit of Menulog positions Uber to enhance its monopoly on the local gig economy through its domination of ride sharing services and food delivery.
IBISWorld’s 2024 Online Food Ordering and Delivery Platforms report found Uber held a 53.8 per cent market share ($1.2bn) compared to Menulog at 23.8 per cent ($526.5m) and DoorDash at 14.3 per cent ($323.6m).
Deliveroo stopped operating in 2022, leaving Menulog and DoorDash as the only competitors to Uber in Australia. The closure is expected to affect 120 jobs and potentially allow Uber to consume the market share left by Menulog.
There are warnings the consolidation of Uber’s market power places Australian consumers at risk of unfair price rises and lower quality of service, as is common with monopolies. DoorDash still provides some competition and there’s always the possibility a new player will enter the game to level the playing field, but for now Uber remains the dominant force in food delivery.
Given Australian demand for the convenience of food delivery, which has increased despite inflation and cost-of-living pressures, this is unlikely to change.
