Just days after riders announced a global network established by the ITF, #Rights4Riders, to protest the company’s business model, Deliveroo is facing setbacks to its IPO listing on the London Stock Exchange.
A slew of major hedge funds have said they will not participate, including Eden Tree Fund management, which described Deliveroo’s unsustainable business model as tantamount to “a race to the bottom with employees in the main treated as disposable assets”.
Legal & General Investment Management, Aviva, Aberdeen Standard, M&G, BMO Global and CCLA have likewise said they will skip the IPO, most of them citing concerns over workers’ rights as their reason not to invest.
Meanwhile in Italy, where thousands of riders across the country participated in a global rider day of action on 26 March, competitor Just Eat has signed a national collective bargaining agreement with Italian unions recognising the employee status of riders, with guaranteed minimum pay, social security, maternity/paternity leave, vacation pay, reimbursement for expenses, and union rights.
This follows Uber’s recent announcement that it would recognise its UK taxi drivers as workers, following a Supreme Court ruling.
These developments have hit Deliveroo hard: on Wednesday, Deliveroo’s first conditional trading day, its share debut was widely described as a flop, with shares plummeting by up to 31% in the worst IPO performance in decades. Earlier in the week, the company had announced it was slashing share prices, cutting £1 billion from its market cap, placing its share price at the bottom of its indicated price range.
But instead of following the example set by competitors and improving conditions for workers, Deliveroo has doubled down. It continues to perpetuate the myth that flexibility is incompatible with the provision of living wages and benefits like holiday pay and insurance.
Stephen Cotton, ITF General Secretary says: “The drive down in pay and benefits for Deliveroo should be a concern for everyone. Over the last decade, the gig economy, characterised by zero-hour and bogus self-employed contracts, has become increasingly mainstream. Today it is food delivery riders facing the wholesale erosion of workplace rights, but tomorrow it will be workers in other sectors unless we address these issues head-on.”
“During the Covid-19 pandemic, workers have lost $3.7 trillion in earnings, most of whom were women and youth, while billionaires have gained $3.9 trillion. Enough is enough: we must end the practice of underpaying workers to increase the enormous wealth of the world’s richest people.”
“Unions remain critical in keeping the unrestrained greed of corporations at bay and in ensuring that work works for everyone. The #Rights4Riders campaign has shown what ordinary people can achieve when they stand united in the face of mistreatment. Deliveroo can stand on the right side of history and agree to provide riders the dignity all working people deserve or continue to deny the riders their fundamental rights.”