LONDON — Deliveroo might be the next on-demand startup to be hit with a legal battle over workers’ rights.
Law firm Leigh Day announced on Monday that it is talking to some Deliveroo couriers (or “riders”) about a “potential legal action” against the London food delivery startup, attacking its current business model as “absurd.”
At issue is the employment status of these riders. Deliveroo classes them as “self-employed,” but Leigh Day suggests that restrictions placed on them by Deliveroo could mean they should be entitled to further rights like a minimum wage and holiday pay.
The firm is asking any riders interested in a potential claim to get in touch.
Deliveroo has faced unrest from its riders before. In 2015, the company was targeted by rider protests over planned changes to their contracts and pay, which some riders alleged would see them paid less than the minimum wage.
With a reported valuation of around $1 billion following a $275 million funding round in August 2016, Deliveroo is one of the hottest businesses in London’s startup ecosystem. It provides a delivery service for restaurants in more than 100 cities in 12 countries around the world.
Leigh Day, the law firm, isn’t shy in taking on on-demand economy businesses. In late 2016, it won a major battle against Uber, the Californian ride-hailing company, when a London employment tribunal ruled that its drivers should be classified as “workers” and entitled to additional benefits. Uber is appealing the ruling.
The so-called “gig economy” can be deeply polarising. Often offering on-demand services, arranged via smartphone, its proponents argue it empowers workers to work when and how they want. But its detractors claim that the model deprives workers of rights they would enjoy if they worked for more traditional businesses.
In a statement, Leigh Day employment lawyer Annie Powell said: “The idea that Deliveroo riders are self-employed contractors in business on their own account and that Deliveroo is a customer of each rider’s business is absurd. Deliveroo riders carry out the sole function of Deliveroo — to deliver food and drink from restaurants to customers — and are tightly controlled by Deliveroo in what is clearly a dependent work relationship.”
She added: “We will argue that Deliveroo has no reasonable grounds to argue that its riders are self-employed contractors and that it should immediately ensure that its riders are paid at least the National Minimum Wage and receive paid holiday.”
A Deliveroo spokesperson did not immediately respond to Business Insider’s request for comment.