Deliveroo Says Its New Union Gives Riders Rights. The Union That Already Represents Them Disagrees.

A union embroiled in a longstanding battle over statutory bargaining rights for Deliveroo riders has branded the food delivery juggernaut’s new partnership with a rival union as “cynical.” The Independent Workers Union of Great Britain (IWGB) has been in court against Deliveroo since 2016, and is currently appealing a judicial ruling that failed to recognise the company’s riders as workers in the Supreme Court.

Deliveroo and its partnering union, the GMB, have hailed their deal as a “first-of-its-kind partnership,” which will allow its 90,000 riders to enter a voluntary partnership agreement, under which they will have rights to collective bargaining over pay. Deliveroo says this will result in guaranteed minimum earnings that comply with the National Living Wage, and its founder and chief executive Will Shu hailed the agreement:

“We are delighted to partner with the GMB in this first-of-its-kind voluntary agreement, giving self-employed riders flexibility, guaranteed earnings, representation and benefits.

“Deliveroo has long called for riders to have both flexibility and security and this innovative agreement is exactly the sort of partnership the on-demand economy should be based on.”

The deal does not address one of the IWGB’s key challenges to Deliveroo’s model: the fact that those wages are calculated only while orders are being delivered. With waiting times unpaid, riders’s earnings in real terms can fall as low as £2/hour, under this “guaranteed” agreement or not. An investigation by the Bureau of Investigative Journalism (TBIJ) in March 2021 found that some Deliveroo riders consistently earn well below that newly guaranteed threshold: “as many as a third of the riders who took part in the survey [by the TBIJ] received less than the legal minimum hourly wage for over-25s of £8.72.” At the time, Deliveroo said:

“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.”

The new partnership is also transparently designed to assuage well-documented concerns from the people Deliveroo truly relies on: investors. When preparing to float on the London Stock Exchange (LSE) for a projected £8.8 billion in March 2021, it admitted in an investor prospectus that legal challenges over workers’ rights could “affect our ability to continue operating” in certain regions, including the U.K. That admission, and the contemporaneous ruling by the Supreme Court that Uber had to classify its taxi drivers as workers, bought renewed attention to the means by which Deliveroo and Uber achieve such stratospheric valuations: depressing labour costs by eliminating minimum wages, pensions, and holiday pay from their balance sheet.

Deliveroo never met that valuation, in part because investors baulked at the possible ramifications for food delivery businesses; in part because its fleeting profitability occasioned by the COVID-19 pandemic’s impact on dining out quickly converted into a loss of £224 million for 2020. But it has, thus far, consistently fought off the IWGB’s central case: that its riders should be classified as workers, saying that the flexibility it claims to offer would be lost in the event of unionisation.

This partnership with the GMB suggests that if not a lie, that was never quite true, as it allows the GMB to gain nearly 100,000 members and allows Deliveroo to further resist the more powerful pressure posed by the IWGB since 2016. As a result, the IWGB has described the partnership as tantamount to “union busting,” in which companies seek to undermine unionisation — here by creating a partnership with a union that has never organised on Deliveroo riders’s behalf.

More soon on the ramifications for the food delivery sector.