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It’s been a rocky road for Australia’s food delivery sector. Over the past decade, major platforms and a smattering of daring, minor players have been jostling for market share. That’s brought rapid change – and also seen several high-profile business casualties.

First came Foodora’s exit from Australia in , which the company attributed to seeing “higher potential for growth” in other countries. Then, Deliveroo , reportedly for similar reasons.

On Wednesday, �ѱ�Գܱ��Dz��� it would cease its Australian business on November 26, citing “challenging circumstances”.

The end of Menulog’s Australian run is a big deal. It signals a different-looking future for the entire food delivery sector. So what does that mean for consumers and delivery workers – and the cost of a home-delivered meal?

Menulog was a “big fish” in Australia. According to  from IBISWorld, it held nearly a quarter (about 24%) of the Australian market. That was still well behind Uber Eats, with around 54% of the market, but ahead of DoorDash on about 15%.

Together, those top three accounted for more than 90% of the market.

Now, DoorDash will move up a step on the podium and be pitted in an even fiercer contest with clear market leader Uber. Both platforms will fight over the spoils of Menulog’s departure.

In one sense, this is just market consolidation, as firms enter the market, compete, fail or get bought out.

But with just two delivery platforms now poised to control the vast majority of the Australian market, there is legitimate cause for concern about what the future holds – for competition, service quality, prices and workers’ rights.

Menulog’s demise didn’t come about because of decreased demand for food delivery. If anything, this market is in rude health, with revenue  in the post-pandemic period.

Nor has Menulog merely lost its appetite for operating in Australia after a quick bite. The company was founded here almost two decades ago in 2006.

In 2015, it was , which subsequently completed a  with Dutch rival Takeaway.com in early 2020, to form Just Eat Takeaway.com (which itself has just been  by a larger investment group, Prosus).

In 2021, �ѱ�Գܱ��Dz��� an expensive TV advertising campaign featuring US rapper Snoop Dogg with significantly raising its profile.

Menulog has always had a slightly different business model and market positioning from its rivals, Uber Eats and DoorDash.

It started as a , allowing people to order from restaurants that may have had their own delivery workers. Later, it adopted a three-sided marketplace model, with the app sitting between consumers, restaurants and couriers – who were operating as independent contractors.

Following multiple reports about �����Ի��� in the food delivery sector more broadly, Menulog tried to  and differentiate itself.

In 2021, it began a  to hire some of its couriers as employees rather than contractors. It also unsuccessfully pursued the creation of a new modern award.

While praised at the time, these moves were to be overtaken by the Albanese government’s gig work reforms, which rejigged the rules and provided .

However, its efforts to pursue a more pro-worker “gig” model meant it incurred significant costs with limited return. Further, compared to its rivals, the company did not diversify as drastically into the .

Menulog’s exit means Australian consumers will have one less platform to choose from. It could also impact the prices they pay for food deliveries.

The norm for Australian consumers is that they have enjoyed food delivery services at subsidised rates. The major delivery platforms have been  in return for growing their market share.

Now that we are seeing significant consolidation in the sector, the remaining platform giants may well move to capitalise on their newfound strength by upping prices.

Yet being profitable as a food delivery platform is a balancing act. These firms operate on relatively thin margins and add very little value. In effect, their business model is one of , taking a cut from each transaction.

For years, this has : consumers wanting cheaper, faster service; restaurants and shops ; and unions and voters concerned about worker safety.

�ճ���� of the gig economy – including food delivery – can push it towards “” and “” conditions. This is where either one or two major platforms dominate a market and prices.

�ѱ�Գܱ��Dz��� its exit from the Australian market would lead to about 120 job losses.

But this figure does not paint the full picture, with thousands of affiliated couriers thrown into uncertainty, too – though not entitled to the same redundancy benefits as employees.

There will be a two-week transition period before the platform shuts down. And �ѱ�Գܱ��Dz��� eligible couriers would be entitled to receive a four-week voluntary payment.

���� by Menulog found 75% of its couriers engaged in “multi-apping” – working for Menulog as well as its competitors. Still, many will be left without a gig.

Workers, like consumers, will now have less choice in the food delivery market.

Republished under Creative Commons licence from The Conversation.