Deliveroo says controversial pay-per-delivery plan is optional

By Hannah Thompson contact

- Last updated on GMT

Deliveroo says controversial pay-per-delivery plan is optional

Related tags: Minimum wage, Uk

Restaurant delivery service Deliveroo has responded to the controversy over its new rider pay-per-delivery plan, saying the new plan is optional and has only been offered as a trial in London.

The company ‒ whose partners include a wide range of restaurant groups such as PizzaExpress, Byron, and GBK ‒ has been in the spotlight recently for allegedly changing delivery payments from the usual per-hour rate to a pay-per-delivery rate within London, and asking drivers to change zones if they don’t accept the changes.

This had prompted critics to suggest that workers (who can choose to ride a bike or drive a scooter to make deliveries) would end up being paid less than the minimum wage, would be under pressure to drive or cycle dangerously fast in an attempt to make up costs, or could be shunted into areas they don’t know well.

Deliveroo has countered today that the new payment plan was solely introduced as a trial in five areas of London, to 280 riders out of more than 3,000 across the capital, and was designed to enable workers more flexibility and the chance to benefit from peak order times.

Riders who opted into the new plan would be offered guarantees of at least £7.50 per hour income at peak times, when working to the new £3.75 per delivery fee plan.

The firm also said that workers concerned had always been offered the chance to stay on the old payment plan, which paid per hour worked including any time not making deliveries.

Criticism 

However, despite its new statement, the company came in for criticism after allegedly sending an email to workers explaining that they would either have to accept the new payment plan, or move to another unfamiliar delivery zone not using the trial, if they wished to remain on the old plan.

The new statement comes after the Department for Business, Energy and Industrial Strategy stated on Sunday last week that the workers must be paid the minimum “national living wage” of £7.20 an hour, unless ruled by HMRC or a court that they are self-employed.  

All Deliveroo workers in the UK are employed on a freelance basis, meaning they choose when or if they work. The company said that 85 per cent of delivery drivers saw the work as supplementary to their main income, or as a “short-term flexible option” that could work around other commitments such as studying.  

The firm also said it was listening to riders’ feedback on the new plans.

Concerns

In a statement, Dan Warne, managing director of UK and Ireland at Deliveroo, said today: "We're committed to having an open conversation with riders about this trial.  We’ve reached out to every rider involved to gather feedback.

“We’ve listened to their concerns and offered every rider the choice to withdraw from the trial. For those that choose to take part in the trial we’ll also be guaranteeing fees at peak times for riders will be at least £7.50 per hour plus tips and petrol costs.”

The company also said: “In the places we’ve piloted [the £.375 per delivery trial] we’ve seen average hourly fees for riders increase by up to x2 the previous payment model at our busiest times. Many drivers tell us they will receive more fees over a shorter period of time with this model, and that this works better for them.”

The statement added: “Ultimately, if this model doesn’t work for our riders, it doesn’t work for us.”

Deliveroo was founded in 2013 by former investment banker William Shu and software engineer Greg Orlowski, and has expanded rapidly since. It recently received a $275m (£212m) funding round to fund yet more expansion.  

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