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Business
Millie Roberts

Milkrun riders say closure of grocery delivery service in Sydney and Melbourne was a long time coming

Milkrun was founded in 2021 and will wrap up business today. (ABC News: Niall Lenihan)

Billy Texas was on leave when he heard of Milkrun's impending closure.

The photographer and costumier paired his creative work with the gig, dropping off food and alcohol orders by bike around Sydney's Surry Hills catchment area.

Mr Texas had been with the grocery delivery service for a year and a half and liked the flexibility and active nature of the job, eventually becoming one of their top-performing riders.

After a string of lay-offs as well as depot hubs being consolidated or closed earlier this year, it became clear that a drastic change was on the horizon.

"I half suspected that I would go away and not have something to come back to," he told ABC News. "We were on a tight string enough as it was."

Despite securing $86 million in capital funding over the past two years, founder Dany Milham on Tuesday made the announcement that shocked many.

Milkrun's founder Dany Milham announced the company's closure on Tuesday. (ABC News: Niall Lenihan)

In an internal email sent out to Milkrun's 400 workers on Tuesday, Mr Milham told staff he made the difficult call to wind up the business, and it would cease trading three days later.

"Economic and capital market conditions have continued to deteriorate, and while the business has continued to perform well, we feel strongly that this is the right decision in the current environment," Mr Milham wrote.

The move means that all headquarters, hub and rider roles will be made redundant today.

Beginning of the end

Dylan Chope is a 20-year-old student who quit Milkrun's Leichhardt division in Sydney's inner west a month ago after being with the company for a year.

He heard about the gig through word of mouth, and was drawn to the impressive pay offering and the stability of part-time hours.

Mr Chope enjoyed the position at first, but soon felt overworked as some of his colleagues were let go this year.

Milkrun hubs had been closed and consolidated before it was announced earlier this week the company would close. (ABC News: Niall Lenihan)

Surrounding branches were also closed, meaning their delivery area radiuses were absorbed by Mr Chope's hub.

"They laid off a bunch of people and basically put all their work on us," he told ABC News.

"There was no stopping, so it was pretty much constant running all day."

Milkrun became popular for its minutes-long delivery promise, but under the changes, Mr Chope said a single trip could take him an hour.

"As the company got busier and busier and they didn't have the money to hire more people, it became bad," Mr Chope said.

"They didn't mistreat us, but it was a really unsustainable system."

Appealing to a younger generation

With its slick marketing aesthetic and active social media presence, Milkrun was a company by and for a millennial and Gen Z clientele, with its workers being at the front of the branding.

Mr Texas made a regular appearance on Milkrun's social media accounts.

The 37-year-old said that while there was a range of age groups working as riders, the company tried to appeal to people in the early to mid-20s.

"They definitely hired young people to make it a fresh and funky brand," he said. "That was the founder as well, that was his image."

Like a lot of tech start-ups, money was being thrown around left, right and centre, and culture-building was a high priority when Milkrun first started in 2021.

"This almost feels like a cult, but a good cult," recalled Mr Texas of his first day induction.

Delivery orders were few and far between back then, meaning there was a lot of downtime to hang out with colleagues and time to catch your breath.

With a decent hourly rate and getting to work with friends, the gig was attractive to swarms of students, creatives and migrant workers in the beginning.

Mr Texas hypothesises that some of the younger staff members might have held onto unrealistic expectations from the company, and soon became disillusioned as business needs changed.

"A lot of people came in hearing about the good times from the beginning, but [Milkrun] had to do well," he said.

"They expected to have fun and get paid well for it, and that's just not realistic."

Trouble on the horizon

Milkrun expanded through inner Melbourne and began chipping away at a solution to stay afloat as its main competitors — Send, Voly and Quicko — shut down in 2022.

But in February this year, the company announced they would lay off 20 per cent of its workforce as part of wider structural changes.

Thomas Main, a former rider in South Yarra, gave his notice a week later. 

"I saw the writing on the wall," he told ABC News.

"It had become apparent to me that around six months ago, maybe more, [that] things were definitely on the decline."

The 22-year-old said in the months leading up to his resignation, morale and communication was at an "all-time low".

While he isn't surprised Milkrun is closing its doors, he thought it would happen earlier.

In a resignation letter seen by ABC News, Mr Main said new rules, regulations and poor management were his reason for leaving.

"The physical and emotional toll [in] this position has left me incredibly fatigued and burnt out, as well as quite unwell in the past months particularly," he said to his employer.

"Constantly being moved back and forth from hub to hub, and concern for job security were significant motives for this."

He said that lack of communication had cast a shadow over the good memories, but he still cherished the friends made and people he met on the job. 

"This was a decision was not made lightly, though the company since joining has changed too much, far too quickly that it has become difficult to work with and support," Mr Main said.

Pulling the plug

Despite being off work this week, Mr Texas has been checking in with his peers over the phone.

Billy Texas is one of Milkrun's staff members who will be made redundant this week.  (Supplied)

He heard that his hub manager was in tears as she broke the news of the close, while a friend who was relying on Milkrun to stay in the country now has five weeks to find another job to meet his visa requirements.

He said that he retains a positive view of the company overall.

"I feel like I'm in a very odd place right now. I didn't lose my job because of my performance," Mr Texas said.

"I did the best that I could do, but since that last lay off round, this [closure] was definitely a possibility."

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