Deliveroo was one of the major gig economy giants to be rocked by the news that riders in the EU may soon become official employees of the company under a new contentious law.
But the delivery company’s CEO and founder is keeping a cool head over a directive that could recognize 5.5 million of the EU’s 28 million gig workers as legal employees.
Speaking on an investor call following the release of 2023 financial results, Will Shu said the company was in dialog with the EU and member states to understand how a newly passed law on self-employed workers would affect his growing delivery service.
The Deliveroo founder was quick to reassure investors that whatever the outcome of the new law, things were unlikely to change in the company’s key markets of the U.K. And France.
Courts siding with Deliveroo
In November, the U.K.’s Supreme Court ruled that gig workers shouldn’t be classed as employed.
“U.K. Law has conclusively demonstrated that riders are self-employed,” Shu said.
Shu added that France had also recognized the platform’s riders as being self-employed rather than entitled to employee benefits.
“These developments mean that taken together we have regulatory clarity and markets that count for 90% of our GTV.”
Deliveroo riders switching from self-employed status to being employed by the delivery service would land Deliveroo with many additional costs, including pension contributions, annual leave and sick pay.
That is something that Deliveroo, which relies on a fleet of casual human capital, is extremely resistant to accept, despite being pushed hard by the EU.
In December, the bloc passed a provisional agreement forcing companies like Deliveroo, Uber, and Bolt to recognize 5.5 million gig workers as employees.
France later blocked this directive as EU members went back to the negotiating table.
A watered-down version of the deal tabled by Belgium, which would give EU member states more say on what workers would be classed as employed, eventually passed in March.
Lobbying efforts by Deliveroo and Uber have left the delivery and ride-hailing giants in a fierce battle with their riders and drivers, creating an unhappy marriage that has resulted in a wave of strike action.
Deliveroo winning battle with riders
Investors are landing on the conclusion that Deliveroo is winning its battle with employment-seeking riders.
Shares in the group jumped in the wake of the U.K. Supreme Court’s ruling in favor of Deliveroo, while the company’s value has been relatively unmoved by apparent victories for riders in the form of EU rulings.
But, despite gaining the regulatory upper hand, Deliveroo still has the small matter of appeasing its group of increasingly frustrated riders.Thousands of Deliveroo and Uber Eats drivers went on strike in the U.K. On Valentine’s Day to protest lower pay and longer shifts.
