Deliveroo, valued at £1.5 billion, is under big pressure to guarantee its riders at least £7.83 an hour

Sean Gallup/Getty ImagesDeliveroo rider.
  • Deliveroo should pay its riders the UK national living wage of £7.83 ($US10.27) an hour, according to a new report from Labour MP Frank Field.
  • The minimum guarantee would mean precarious “gig economy” workers, who fuel the growth of platforms like Deliveroo, would have a safety net.
  • Deliveroo has argued that guaranteeing riders a wage would compromise their flexibility, and might force the platform to charge more money for its service.
  • On Monday, the firm proposed a “charter” that would allow it to provide riders with more benefits – but not necessarily the national living wage.

Fast-growing food delivery startup Deliveroo should guarantee its riders the national living wage of £7.83 ($US10.27), according to a damning report from Labour politician Frank Field.

Field found that Deliveroo paid some riders as little as £2 or £3 an hour, while others earned up to £20 an hour delivering takeaway food to customers.

“Across the online food delivery sector of the ‘gig economy’ as a whole, around 158,000 individuals report being paid less than the National Living Wage,” Field wrote.

The lawmaker was strongly critical of Deliveroo’s model, which is reliant on a “continued oversupply and underutilisation of workers” to fuel its growth.

Deliveroo said Field’s proposal would “remove flexibility,” which it said riders value. It also denied maintaining an oversupply of riders.

Deliveroo is one of the fastest growing startups in the UK, with a valuation of around £1.5 billion ($US2 billion). The company relies on “riders” on mopeds or bicycles to travel short distances to pick up food from local restaurants then deliver it to customers. These riders are not full-time employees, but “gig economy” contractors who don’t qualify for the minimum wage or benefits.

Field, as chair of UK Parliament’s Work and Pensions Committee, has been examining ways to give this new breed of workers more security.

Frank FieldGettyFrank Field MP.

He wrote that while some Deliveroo riders enjoyed the flexibility of shifts and earning-per-delivery, others were reliant on riding for their main income.

“The emergence of platforms like Deliveroo has opened up the prospect of work to many people on the fringes of the labour market who would otherwise struggle to find a job that fits their circumstances. This represents a significant boost to the British economy as well as our society,” Field wrote.

“[There] is a flipside: too many of these vulnerable workers have nowhere else to turn if their pay and working conditions deteriorate and their living standards begin to suffer. We call on platforms to consider urgently what additional forms of security they are able to offer such workers without asking them to sacrifice the flexibility they currently have in fitting this work around other commitments.”

A Deliveroo spokesman responded: “Deliveroo believes more can be done to increase the security for riders while protecting their ability to be their own bosses, which is why we have introduced free, market-leading insurance for all, covering riders in case anything goes wrong.

“But we want to go further, and have called on the government to update employment rules to end the trade-off between flexibility and security and enable platforms to offer riders even more benefits without putting their employment status at risk.”

Deliveroo also tried to get out its own message ahead of the publication of Field’s report.

On Monday, the company made a call for a government-sanctioned “charter,” potentially enshrined in law, that would allow it to offer certain benefits to employees with risking their self-employed status. Crucially, however, Deliveroo did not proactively suggest paying its riders the national living wage.

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