Six large UK investment firms say they will not purchase Deliveroo shares following concerns over workers’ rights.
The delivery company hopes to be valued at up to £8.8bn when it lists its shares in April, however, Aberdeen Standard, Aviva Investors, BMO Global, CCLA, LGIM and M&G said they were put off by factors including the working conditions of its riders and lack of investor power. A third of Deliveroo riders are paid less than minimum wage according to a damning new investigation which is already threatening investor confidence ahead of its Initial Public Offering.
Deliveroo, which employees over 100,000 riders across 12 countries, is allegedly paying some riders in the UK as little as £2 an hour.
According to a new report from the Bureau of Investigative Journalism, which examined invoices from 300 couriers across the UK, one in three riders made less than £8.72 an hour, the national minimum wage for workers aged over 25.
While Deliveroo says that its riders are paid more than £10 an hour on average, the analysis revealed that more than half were paid less.
Deliveroo considers its riders to be self-employed, and points out that the High Court has upheld that view, adding that Deliveroo says its riders value the flexibility that employment status gives them.
Commenting on the report Deliveroo said the sample of 300 people was “not a meaningful or representative proportion” of their riders and that they can earn up to £13 an hour “at our busiest times”.
Deliveroo is believed to have set aside over £112m to cover potential legal costs relating to the employment status of its delivery riders.
A Deliveroo spokesperson 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