Parliamentary Inquiry Finds Deliveroo Works for Some, But Not for Others

A parliamentary inquiry has presented delivery giant Deliveroo with a “map and compass” to help achieve its stated dual goal of rider flexibility and employment security. The inquiry followed a union defeat on the issue back in June.

Frank Field MP and Andrew Forsey released ‘Delivering justice? A report on the pay and working conditions of Deliveroo riders’ today, finding that Deliveroo’s employment model engenders a polarised labour market that works well for some and poorly for others. There is a big gap between average earnings for the platform’s riders, with some earning £20 an hour while others earn as little to £2-£3 an hour for identical work. Flexibility on hours clearly leads to flexibility on pay.

Field and Forsey’s report bridges this gap with a spectrum of proposed solutions: a formal worker status for regular riders, a wage guarantee for those who benefit from the “gig” aspect of the gig economy, and a sweeping review of gig economy work that will root out those companies that profit from underpaid work and place the onus to improve workers’ rights on those companies, rather than on employees.

Commenting on the report’s findings, Field said:

The self-employed status and part-time nature of much gig economy work has given the labour market a flexibility that is still relatively new. Some of those workers who are keen to seize this opportunity view it as a short-term option while they develop their longer term earning power — setting up their own business, starting on an artistic career and the like.

‘But for an unknown number of workers these imposed self-employment opportunities are all there is on offer, even though their need is for stable work for at least the level of the National Living Wage. It is this group that we are concerned about in this report and have been in each previous report we have published on the gig economy. The reform programme we outline will, I hope, be picked up by Deliveroo and the Government as a means of both protecting this group while preserving the flexibility that so many riders have said they value.

The outcome of this report is a series of reform recommendations, less actions. Field focusses on those who are trapped by Deliveroo’s flexible work offering, and it is this group that most often suffers; it is this group which finds itself subject to severe underpayment. This applies to Deliveroo and the gig economy at large, with the proposed recommendations for wider reform reading as follows:

1. The Director of Labour Market Enforcement should investigate those sectors offering platform jobs, and report on both levels of pay for different groups and the reality of self-employed status.
2. The fines imposed by agencies acting on behalf of the Director of Labour Market Enforcement should be reinvested in a common workforce which is more proactively tasked with protecting workers’ rights in the modern economy. And those employers should be continually monitored, and regulated.
3. To prevent individuals having to take companies to employment tribunals, employment law should be reformed so that it is companies who have to prove beyond doubt they meet certain criteria showing their workforce to be self-employed.

These recommendations would put the onus for transparency on the government and the firms that use the gig economy, rather than on employees who are being left out of pocket: workers’ rights would be a fundamental part of the gig economy.

Perhaps seeking to preempt the inquiry’s findings (which had been expected to be released this week), Deliveroo yesterday published a “new Charter to allow companies to give greater security to the self-employed.” Dubbed “a Charter for secure, flexible work”, a cynical reading might call it governmental lobbying designed to influence policy makers as they seek to implement reform that protects both self-employment and workers’ rights.

Commenting on the delicate balance, Deliveroo said:

Deliveroo is making free insurance available to all 35,000 riders it works with globally, and would like to go further. However, companies such as Deliveroo are currently constrained in offering security to self-employed riders, as legislation means that doing so would likely result in riders having their employment status reclassified through the courts. This in turn would limit the flexibility riders value as they would have to work in compulsory sessions arranged with Deliveroo in advance and ride exclusively for the company during those sessions.

These “constraints”, of course, take the form of contracts that legally guarantee a set number of hours or shifts to the worker. Using “compulsory sessions arranged with Deliveroo in advance” ensures that Deliveroo remains rule-maker.

The company also advocates for a situation in which “benefits can be accrued on the basis of work performed rather than hours or days worked, allowing riders to continue enjoying the flexibility of being able to work with multiple companies at the same time, whenever and wherever they want.”

“Work performed” is qualitative and plays to Deliveroo’s advantage. While this might promise flexibility for workers, it also absolves Deliveroo from contractual obligations associated with shift work, and shifts key performance indicators (KPIs) on to riders without the safety net of a wage or benefit accruing over time.

Finally, the comparison to reforms proposed by Emmanuel Macron in France misses out one key factor: those reforms are not only driven by a fundamental desire to improve the balance between flexibility and security (and put employment regulation in the hands of a private company, rather than the government) but by a need to drastically reduce France’s 9.7 percent unemployment rate. (The UK’s unemployment rate, by contrast, is currently 4.2 percent.)

Deliveroo’s repeated desire to improve flexibility and security for workers has thus far been commendable but troublingly ambiguous. With this charter and report — while actions are not yet laid out — the groundwork is there to improve the working conditions of the riders that the platform so relies on.

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