Big investors shun Deliveroo as study finds some riders paid below minimum wage

By James McAllister

- Last updated on GMT

Big investors Aviva Investors and Aberdeen Standard shun Deliveroo market float as study finds some riders not paid minimum wage

Related tags: Deliveroo, delivery, London stock exchange, Minimum wage

A survey of more than 300 Deliveroo couriers has found that one in three made less than the national minimum wage.

While Deliveroo, which is currently preparing for an £8.8bn market flotation on the London Stock Exchange​ next month, says that riders are paid more than £10 an hour on average, an analysis by the Bureau of Investigative Journalism in partnership with the Independent Workers’ Union of Great Britain found more than half were paid less than that.

In response to the analysis of pay, a spokesperson for Deliveroo said: “Deliveroo riders have the complete freedom to choose when and where to work and can choose which deliveries to accept and which to reject. 

“50,000 riders choose to work with Deliveroo, and thousands more people apply to work with us every week. Our way of working is designed around what riders tell us matters to them most – flexibility. Riders in the UK are paid for each delivery they choose to complete and earn £13 per hour on average at our busiest times.”

The figures have emerged as two of the UK's largest fund managers, Aviva Investors and Aberdeen Standard, have said they will not buy Deliveroo shares because of concerns over workers' rights.

Andrew Millington, head of UK Equities at Aberdeen Standard, told BBC Radio 4​'s Today programme that the conditions were a 'red flag', adding: "We wouldn't be comfortable that the way in which its workforce is employed is sustainable."

Deliveroo employs more than 100,000 couriers across 12 countries. Its riders are deemed to be independent contractors and are paid by the number of meals they deliver rather than a hourly wage. The classification means that they are not deemed to be full-time employees so do not benefit from certain workers’ rights.

David Cumming, chief investment officer at Aviva Investors, said it will avoid Deliveroo’s IPO for several reasons including workers’ rights. He told Today ​there is a 'combination of investment risk and social issues' that affects Aviva's judgment over whether the shares are a buy or not.

“A lot of employers could make a massive difference to workers’ lives if they guaranteed working hours or a living wage, and how companies behave is becoming more important," he said.

The status of so-called gig workers was recently boosted by a decision of the UK Supreme Court, which determined that Uber drivers, who did not receive full workers’ rights, should be classified as workers.

However, Uber has subsequently said the judgement 'does not relate' to its restaurant couriers.

Related topics: Business & Legislation

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