Foodora Quits Australia Amid Wage Accusations

The food delivery company is ceasing operations in Australia, however still needs to defend two lawsuits in the country.

Food delivery service Foodora will cease its Australian operations with a key union suggesting the exit is an attempt to avoid paying workers millions of dollars owed in back pay.

Workers will only be given one week of normal shifts before the company begins winding down.

The company, in a statement released on Thursday, said it would "cease operations in response to a shift in focus towards other markets where the company currently sees a higher potential for growth".

Foodora will shut down in Australia by August 20.

The Fair Work Ombudsman took the company to the Federal Court in June alleging two Melbourne bike riders and a Sydney driver were classed as "independent contractors" when they did the work of full-time employees.

Another rider appealed to the Fair Work Commission saying he was unfairly dismissed after speaking out over low pay and poor condition for delivery riders.

The food delivery company is facing two lawsuits in Australia for unfair dismissal and sham contracting. Image: AAP

His campaign attracted the attention of the Transport Workers Union who, on Thursday, accused Foodora of abandoning Australia while owing millions of dollars in back pay.

"Ever since they arrived in Australia, Foodora, like other food delivery companies, has denied its riders fair rates, superannuation, workers compensation, annual leave, the right to collectively bargain and even forces them to work shifts for no pay at all," TWU national secretary Tony Sheldon said in a statement.

He called on the federal government to force Foodora to compensate workers for "18th-century conditions".

Foodora denied the union's claim, insisting it will continue its legal battles in Australia and is also divesting from France, Italy and the Netherlands.

"Foodora will continue to manage legal proceedings locally in Australia and will continue to treat them with the utmost importance," a spokeswoman told AAP on Thursday.