Foodora is in hot water

Aug 29th, 2018

After deciding to pull out of Australia in the wake of a lawsuit brought forward by the Fair Work Ombudsman for sham contracting and underpayment of staff, Foodora now also faces tax liabilities.

Revenue NSW’s verdict is that Foodora’s riders were actually employees and therefore attracted Payroll Tax. Foodora repeatedly insists that its riders are independent contractors. This distinction drastically affects the size of the tax bill. The Australian Tax Office is also putting the squeeze on for outstanding superannuation, penalties and interest.

Initially Foodora was to cease operation on August 20, but went into voluntary administration on August 17, suspending the potentially precedent-setting sham contracting case against the gig economy and leaving a large unpaid tax bill.

The Transport Workers Union on behalf of Foodora riders is among creditors who will meet with the voluntary administrator in Sydney today.

The TWU will stage a protest outside prime minister Scott Morrison’s Sydney office ahead of the creditors meeting. Riders will demand rights and protections with a TWU survey showing three out of four riders are paid below legal minimum rates.

The union has written to incoming Minister for Jobs and Industrial Relations Kelly O’Dwyer calling for the establishment of a fund to compensate riders for unpaid wages and entitlements.

The TWU has also called on the Federal Government to protect other workers in the on-demand economy.

Back to News