Deliveroo offers per-trip pay to defuse workers' row

The takeaway delivery company Deliveroo is apparently attempting to defuse a row over its workers' status by offering a per-delivery pay model that it says will increase average earnings.

The backdrop to all this is a tribunal over workers' rights that could undermine the company's "contractor" employment model in a landmark turning point against the so-called "gig economy".

The Daily Telegraph says that an email from the company’s UK managing director Dan Warne is offering its 3,000 UK riders the option of being paid between £3.75 and £4 per delivery.

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At the moment workers are paid an hourly rate plus £1 per delivery.

"It told riders that in tests so far the workers who have chosen this option earn an average of £12 per hour worked, compared with £9.50 for those who use the current system," says the Telegraph.

This is about more than just offering an additional pay incentive linked to workers' flexibility. Deliveroo hopes the move will "reinforce the riders' status as self-employed contractors, rather than employees", adds the paper.

In addition to the remuneration reform, workers who opt for the new system would be able to refuse jobs more easily depending on their location and be given more information on the times of day that are busiest and so more lucrative to work.

"However it could hit earnings for those working at quieter times of day, and make longer journeys less appealing," says the Telegraph.

Ultimately the idea is to ensure that Deliveroo's current model of classifying deliverers as self-employed contractors – and so not having to guarantee rights like holiday or sick pay – is secured.

The company is defending the model, which it says offers workers more flexibility in a hearing at the Central Arbitration Committee brought on behalf of a number of London riders.

Unions acting on behalf of the riders say they should be classified as "workers" for the purposes of employment law, which is a middle-ground option that enables them to be taxed as self-employed but guaranteed key rights.

Tax specialist George Bull at RSM says the new pay model "would help create self-employed status because there would be a direct relationship between the volume of work done and the pay received".

He adds: "It wouldn't be conclusive, but it would be a small extra weight in the scale pan tilting in favour of self-employment status for tax."

Deliveroo tribunal battle goes to heart of 'gig economy'

26 May

Deliveroo is locked in a tribunal battle that could become a landmark case for the future of the so-called "gig economy".

The Central Arbitration Committee is "investigating whether Deliveroo's drivers are independent contractors... or whether they should be classified as workers with rights to holiday pay, the national minimum wage and collective bargaining via a union", says The Guardian.

Deliveroo delivers takeaway food from a variety of independent restaurants, using riders who are classified as self-employed contractors. This is a typical method of the gig economy model, with Deliveroo and the likes of Uber and Airbnb claiming to be merely middlemen between customers and small independent workers.

However, the Independent Workers Union of Great Britain (IWGB) says the firm is effectively exploiting a legal loophole to provide standard services at a cheaper rate than competitors and save on workers' holiday and sick pay.

Drivers are fighting for the right to be classed as "workers", a middle-ground option between employed and self-employed that gives these rights but does not allow for others, such as the ability to claim for unfair dismissal.

Lawyers for IWGB quoted from emails and transcripts of recorded conversations to show couriers had been told they would no longer be classed as self-employed if they gained worker status.

They also said riders were "told they could be sacked for not wearing a uniform, would have to work set hours and be paid via PAYE so that they could not manage their own tax affairs".

Dan Warne, Deliveroo’s UK managing director, said the company was "committed to protecting the full flexibility that riders enjoy and is fighting for riders' ability to work with Deliveroo and its competitors at the same time".

In addition, he defended claims over fixed hours, saying the company would "have to be prescriptive" if it was forced to comply with minimum wage laws.