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17 May 2018updated 05 Oct 2023 8:16am

Don’t be fooled by Deliveroo’s share handout – 30,000 workers are excluded from its success

Companies like Uber and Deliveroo are corporate rent seekers, not decent employers.

By James Farrar

This week Deliveroo announced it was handing over a share pot worth £10m to its employees, but the firm’s 30,000 riders won’t be cycling off with a windfall anytime soon. This lolly is reserved for 2,000 management insiders, because Deliveroo insists its riders are self-employed contractors not worthy of a stake in the business literally built on their backs.

Deliveroo founder Will Shu explained the scheme in a letter to the chosen ones:

Deliveroo’s success is not just my success. It’s our success. This is not just my company. It’s our company.

Tech start-ups often hand out shares to staff, usually redeemable when an exit happens – Silicon Valley code for when venture capitalists liquidate their position and cash in. Exit thinking permeates management culture in gig economy firms. Everything is focused on the final sale and the big pay day, rather than running the business as an ongoing concern.

Never mind if the growth is unprofitable and unsustainable. Never mind if workers are getting burned out or are being exploited. Just call them self-employed contractors, and pay them a piece rate. Never mind if workers exit, get sick or are injured. Thanks to loopholes in the law, there is no employer liability or duty of care here.

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Excluding Deliveroo riders from the share scheme is symptomatic of a more serious crisis in capitalism. In the old days, the bosses supplied the capital while workers brought their labour and both sides fought it out for a share of the spoils. Today, workers supply the capital and the labour, yet still lose the battle for fairness. Companies like Uber and Deliveroo have mastered technology on such a scale that they have become corporate rent seekers. They transfer responsibility for operational risk while commandeering a lion’s share of the profits.

Yet sooner or later, investors in the gig economy will be forced to reckon with the true financial and human cost of this business model. Shareholders in Deliveroo will no longer be able to ignore the suffering of riders. Take the IWGB member in Brighton, who ended up in hospital with hypothermia after a shift in atrocious weather. They’ll no longer be able to put service standards ahead of occupational safety, which happened when a conscientious Dublin Deliveroo rider was knocked down. She phoned the Deliveroo base to let them know she had been in an accident and couldn’t complete the delivery. The first question from the Deliveroo manager: “Is the food still OK?”​

Recently, Liz Truss MP, Chief Secretary to the Treasury, declared in a series of tweets that “every generation wants their own version of freedom – freedom to shape their own lives. This generation are Uber riding, Deliveroo eating freedom fighters.” She’s right, gig workers do want to strike a blow for freedom. That’s why this week Deliveroo riders at the IWGB are launching a crowd justice fund raising campaign to continue to fight the company in court for the right to minimum wage, holiday pay and trade union recognition.

The IWGB lost an earlier bid to secure rights Deliveroo workers in a case argued before the Central Arbitration Committee. But the facts on the ground remain the same: workers are being exploited. So, even though the union has now been saddled with a £10,000 bill for Deliveroo’s lawyers, there is a determination to challenge the CAC ruling in the High Court and beyond.

We will also continue the battle against Uber in the Court of Appeal later this year. We seek a different kind of freedom from that on offer from Liz Truss or Will Shu but it’s exactly the kind of freedom that Deliveroo riders and many more of us in the precariat really need.

James Farrar is an Executive Committee member of the IWGB union and a lead claimant in the union’s worker rights case against Uber.

In response to this comment piece, a Deliveroo spokesperson said:

“Deliveroo is proud to be a British tech success, something that has only been possible thanks to our amazing riders. The company is committed to growing and expanding, providing the best possible service for riders, restaurants and customers. For example, for riders, last week we announced that we are providing our riders with free insurance worldwide.

“Companies that make employees shareholders are more productive and have greater long term sustainability which is our aim. Quite simply, it’s the right thing to do. Therefore talk of an exit event is not only completely wrong, it also reveals that the IWGB appears keener to tarnish Deliveroo than see it succeed.”

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