- “Gig economy” companies are increasingly in the news over workers’ rights issues.
- Critics allege that they sometimes pay what is effectively less than minimum wage, and get around it by classifying couriers as self-employed.
- The companies tend to counter that they make sure workers get paid well above the legal minimum.
- Business Insider has rounded up the rates paid by many of the major players in the industry.
LONDON — You can’t walk more than a few yards in Britain’s capital without spotting a courier.
On bikes or mopeds, they zip around London, delivering everything from takeaway meals or high-end fashion. They’re the most visible part of the “gig economy,” a growing sector of the economy that focuses on short-term work, often organised via smartphone app — and has been the focal point of angry protests and legal battles over workers’ rights.
So how much do you actually get paid to work as a gig economy courier today? Business Insider spoke to Maggie Dewhurst, who works on the couriers and logistics branch of the Independent Workers Union of Great Britain (IWGB), as well as some of the companies involved.
The short answer: It varies
Business Insider has rounded up the rates paid to couriers by “gig economy” companies below. Scroll down to see them, or read on for discussion of the debate around the industry’s model.
Depending on who you speak to, the term “gig economy” can have very different connotations. To its supporters and the companies involved, it’s an entrepreneurial new way of doing business. Gig economy workers are able to maintain their independence, jumping from job to job and working how and when it suits them.
Detractors, on the other hand, argue it can be an exploitative business model that deprives workers of the rights they’d have if they were classified as employees — sometimes leaving them in precarious financial circumstances.
Dewhurst, a bike courier who won a legal battle over her employment status with logistics firm CitySprint, argues that many couriers are effectively paid less than the national minimum wage (NMW), which they would be entitled to if they were classified as employees rather than self-employed.
“Most companies are paying below the NMW once expenses (costs incurred by the job) are taken account of, and definitely once sick pay, holiday, tax, NI’s, pensions etc., are accounted for,” she wrote in an email. “And I’m confident that many people’s pay regularly falls below the NMW before such equipment and administrative expenses are taken into consideration anyway. If you don’t have a right to, you simply aren’t going to get it.”
One concern for her is the payment-per-delivery model that some companies use. If it’s a busy period, and the deliveries don’t take long, then the couriers can make good money, she argues — but during quiet times there will be far less demand, and couriers will be making a much lower effective hourly rate as they sit around waiting for jobs to come in.
“Couriers are therefore providing hours and hours of free labour when it’s quiet waiting for orders, providing a service, being under a company’s control and at their disposal, but are not paid a penny! Likely in reality couriers are losing money because it’s costing them to wait around for work rather than costing the company!”
How do companies respond to this? Gophr is one such delivery startup that uses a pay-per-drop model. In an email to Business Insider, its CEO Seb Robert said the firm is “very sympathetic to the IWGB’s point of view.”
“We understand that demand can be peaky, but this is why a per-hour model only isn’t sustainable, particularly in an industry where customers demand fixed (and therefore easily forecastable) costs for jobs. We have already seen a lot of companies on the per hour model – particularly in the on-demand tech space – go out of business or be taken over for pennies on the pound in the last 9 months due to them subsidising the cost of delivery to the point of oblivion. I believe even more of these types of companies will join them over the coming months,” he wrote.
“Some couriers like a per hour model, some prefer a pure-play per-drop model. We tend to find the best couriers go for the latter as they can make more whilst having a flexible lifestyle. The point here is not the model that’s employed; it’s respecting the self-employment guidelines in the first place.”
The rates paid to couriers
Companies that pay on a per-drop basis typically pay between £3 and £5 per drop, while those that offer hourly wages vary between about £8 and £10.
The full rates paid by various courier companies operating in London are below, but first, a few things to bear in mind:
These comparisons are not always apples-to-apples. Some companies may have longer average delivery distances than others, meaning couriers working for them can do less per hour than with other services. Some allow couriers to carry out multiple deliveries at once. And there are other non-financial differences between companies, including the degree of freedom they give couriers. Deliveroo assigns couriers set weekly shifts, for example, while UberEats couriers have the freedom to clock on and off when they want.
The list also isn’t exhaustive. While it gives a good view of the space, not every player is included. (But if you know the rates for a company left out, get in touch!)
And lastly for reference, the UK minimum wage is £7.20 for people over 25 (also called the National Living Wage), rising to £7.50 per hour from April 1, 2017. The London Living Wage — a voluntary higher wage that some companies promise to offer — is currently £9.75 per hour.
- CitySprint. A major UK delivery network, CitySprint pays couriers per delivery, at varying rates. These average out at £3.50 per drop, Dewhurst said. The company declined to comment on the record.
- eCourier. Another general-purpose UK delivery service, it offers £3.15 per drop, along with bike maintenance payments of 10p per mile, and a weekly attendance bonus, Dewhurst said.
- Absolutely. Absolutely is no startup — it was founded back in 1865. It pays a minimum of £3 per drop, with higher rates for 25% of work, averaging out at £3.25/drop, Dewhurst said. When asked, a spokesperson said it was “commercially sensitive information that I am not privy to.”
- Excel Couriers. Owned by CitySprint, Excel Couriers pays between £2.75 and £3 per delivery, according to Dewhurst.
- Gophr. Gophr, also mentioned above, is a London-based delivery startup. It pays two couriers £10/hour, and the rest £5 per drop, Dewhurst said: “Cycle couriers at Gophr not on the hourly pay scheme earn about £80/day on average, for a 9-hour day, which is about £8.88/hour before expenses.” CEO Seb Robert said in an email that couriers paid on a per drop basis, with a minimum of £3.82 but “closer to £4.82” after commission.
- Quipup. Founded in 2014, Quipup pays £8/hour, Dewhurst said. The company did not respond to Business Insider’s request for comment.
- Stuart. Recently acquired by GeoPost, UK general manager David Saenz said that as of the start of 2017, this French-headquartered delivery business’ couriers were earning “on average between £9.5 and £10.5 per hour, including during off-peak hours, and that the company “take[s] our relationship with couriers extremely seriously, both in terms of ensuring that they earn well above minimum wage and treating them with the full respect they are due.” (The figure Dewhurst had quoted was lower, at £8/hour.)
- Jinn. Jinn, an East London startup, lets users get anything delivered, even if the shop doesn’t offer delivery itself. It recently changed its pay scheme to pay couriers between £8 and £17 an hour, depending on the time of the week, so long as they make one delivery per hour. If they do less, they get a per drop payment of £7. The change sparked protests outside the company’s offices, with some couriers arguing because deliveries can sometimes take more than an hour to fulfil, they’re effectively paid less than minimum wage.
- Deliveroo. Major food delivery business Deliveroo splits London into a series of zones for its deliveries. 70% pay £7 per hour, plus £1 per delivery, while 30% pay on a per drop basis, of £3.75, £4, £4.25, or more, Dewhurst said. A Deliveroo spokesperson confirmed that, saying that the company has “found that riders who are on drop fee are making significantly more money.”
- UberEats. Ride-hailing behemoth Uber pays couriers for its food-delivery side-business £5.33 per drop during off peak hours, according to a spokesperson, and during peak hours pays guaranteed fees of between £14 and £22 an hour (before Uber’s service fee of 20% for mopeds and 25% for bikes is deducted), so long as certain conditions are met, including making at least 1.5 deliveries an hour and successfully delivering 85% of deliveries throughout the week.
Do you work for a gig economy company — whether as a courier, an in-house employee, or the CEO? We want to hear from you, so get in touch: [email protected]