Toronto food delivery service Favor shuts down

The American service's Canadian expansion ended abruptly on Monday, with management blaming Toronto's parking, traffic and restaurant wait times.

Announcement comes days after UberEats drivers stage protest against wage cuts

Favor, the Texas-based delivery service, has stopped operations in Toronto. (Favor)

There's more bad news Monday for people who rely on having their food ordered in.

Favor, one of several food delivery services in Toronto, is shutting down its operations immediately, citing issues with the city's density — which includes parking, traffic and restaurant wait times.

"As a dense tier 1 city, Toronto does not fit the profile of our smart-scaling growth plan," said Favor's Uri Bogler in an emailed statement.

The shutdown leaves Favor's workers — known as "runners" — suddenly out of work. Tibor Gonzalez, who worked for the company, said employees found out about the shutdown via text message on Monday morning, just 30 minutes before they were set to start working.

Gonzalez said he believes some 200 people were working as runners.

The Texas-based company, which had attempted to differentiate itself by delivering other products as well as food, was testing out Toronto as its first Canadian market.

"We will continue to evaluate expansion opportunities in tier 2 markets across Canada," Bogler's statement said.

Favor doesn't currently operate in large, dense American cities like New York, Chicago or San Francisco, either.

Delivery companies being forced to adapt

There are still several companies in the food delivery market, including Foodora, DoorDash and Just Eat, as well as other companies that allow customers to pick up their own food but skip the line.

Yet the shutdown comes days after drivers working for UberEats staged a demonstration to protest against the company's decision to change its payment structure. Drivers say the changes could cut their profits in half, even though Uber is offering a bonus for delivering in some areas.

UberEats also closed its instant delivery service earlier this year.

Feast, the east-end food delivery service, stopped its lunch deliveries and now sells them at local cafes instead. The company is also reportedly considering high-tech vending machines to sell its packaged meals.

"Running an on-demand service is challenging: from the technology to the food production to the service experience. Our category has undergone some challenges across North America with various delivery and virtual restaurants facing similar challenges," Feast's Steve Harmer wrote in a blog entry.