A new study by the Bureau of Investigative Journalism (TBIJ) has found that restaurant delivery giant Deliveroo is compensating at least one of its delivery riders with as little as £2 per hour.
With the company on the verge of an £8.8 billion float on the London Stock Exchange (LSE) and having recently, if tacitly, conceded that its business model relies on the exploitation of workers, new analysis provides a window into the extent of that exploitation in many cases. Thousands of invoices sent by its couriers “found that as many as a third of the riders who took part in the survey received less than the legal minimum hourly wage for over-25s of £8.72,” the Guardian reports today, 25 March.
Founder Will Shu’s 6.2 percent ownership of Deliveroo would earn him £500 million should the projected £8.8 billion come to fruition when it lists on the LSE. “Other major shareholders, including Amazon, are also set to pocket huge windfalls,” TBIJ reports.
The float and the timing of the worker report comes at a time when a new focus has been placed on the status of so-called gig economy workers. The U.K.’s Supreme Court recently ruled that rideshare company Uber must classify its drivers as workers, which obligates it to pay a minimum wage, pension, and holiday.
While that ruling isn’t necessarily going to affect food delivery immediately, it has re-shined a spotlight on the means by which the likes of Deliveroo and Uber have grown to achieve multi-billion-pound valuations, despite being operationally loss-making. These companies function by depressing labour costs through the elimination of minimum wages, pensions, and holiday pay from their fixed costs; the Supreme Court ruling prevents Uber from doing that in the U.K.
Deliveroo is currently fighting legal battles on multiple European fronts over the status of its riders, with the Guardian reporting that it has now set aside a pot of £112 million “to cover legal costs of delivery rider cases.” It has highlighted legal challenges over rider status as among the major risks it faces: “We recognise the inherent uncertainty connected to regulatory inspections and investigations,” Deliveroo said.
Indeed, some prospective investors have pointed out the precarity of its worker status as an inherent investment risk. One U.K. fund, Aviva, said this very thing: A lack of workers’ rights currently represented an investment risk.
But the restaurant delivery giant remains unmoved. Responding to the figures, a Deliveroo spokesperson reiterated the line it has dined out on since its inception — that it provides “flexible” work: “We are proud to provide work for 50,000 riders in the U.K. and that thousands more people apply to work with us every week.
“Deliveroo riders are self-employed because this gives them the freedom to choose when and where to work. Every rider is protected with free insurance and our way of working is designed around what riders tell us matters to them most — flexibility.”
There are likely to be many more twists and turns in this story — not least as attention will remain fixed on Deliveroo and its high-profile public listing. But, amid the billions, this plotline must not be lost: A story of a fight for fair compensation and basic workers’ rights.