Foodora Canada reaches $3.46M settlement with riders

Before Foodora’s closure, workers were granted the right to unionize under the CUPW

The parent company of the now-defunct delivery service Foodora has agreed to settle its dispute with former riders following the company’s abrupt exit from the Canadian market early this year.

Delivery Hero, the Berlin-based owner of the subsidiary Foodora Canada, announced it will pay former delivery crew members a total of $3.46m after the subsidiary closed down in May, in the midst of the COVID-19 pandemic.

Before the closure, however, Foodora workers in Toronto and Mississauga were granted the right to unionize under the Canadian Union of Postal Workers.

At the time, the Ontario Labour Relations Board (OLRB) said the food couriers were dependent – and not independent – contractors, as they had previously been classified.

This week, Delivery Hero said the settlement resolves the ongoing claims lodged by the CUPW before the OLRB on behalf of the riders.

“Following the difficult decision to shut down the Foodora Canada business, we have been committed to finding a way forward that our entire delivery community can agree with,” said David Albert, Foodora Canada’s managing director.

“Particularly given the hardships created by the COVID-19 pandemic, we’re glad to have reached an agreement to financially compensate riders, Foodora Canada’s employees and other creditors to minimize the impact of exiting the Canadian market,” Albert said.

CUPW President Jan Simpson welcomed the outcome of the negotiations. “This settlement shows what happens when workers have unions fighting for them,” Simpson said in a statement.

“To lose your job during a global pandemic is stressful, but to lose it as a gig worker, with no guaranteed access to government funds is truly terrifying,” she said, adding that the settlement can “lessen the financial stress imposed on the foodsters”.

In April, Foodora announced the closure of its Canada business citing the country’s “highly saturated market for online food delivery” which has lately seen “intensified competition”.

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