One year on from the ‘the worst IPO in London’s history’ today is food delivery app, Deliveroo’s first annual general meeting (AGM) – and the spotlight will be on the company’s poor record on worker rights.
The meeting is the first time for the company’s shareholders to publicly and collectively challenge its ongoing workforce failings and set the tone for future engagement on this issue.
But it is not only investors who will be there to challenge the company.
We’ve joined with Deliveroo riders to ensure their voice is heard – with questions for the board on poverty pay, dangerous working conditions, and unfair dismissals.
It is time for both the company – and its investors – to wake up and hear these concerns. Failing to will leave the company behind the curve.
A year on from Deliveroo’s AGM flop – has anything changed?
The buzz around London’s biggest tech IPO last year was quickly extinguished as investor after investor lined up to not only abstain from the offering – but publicly state their intention to do so.
This included large asset managers such as Aviva Investors, abrdn, M&G, BMO Global Asset Management, CCLA, Hargreaves Lansdown, Rathbone Greenbank, Jupiter Asset Management, Scottish Mortgage, and Eden Tree Investment Management.
There was a range of reasons cited for their decision to abstain, including social considerations including the legal, litigation, and regulatory risks around the status of Deliveroo riders; the safety and welfare of riders; and the human rights of those riders and their entitlement to a minimum or living wage. Investors were also concerned about governance issues that would have given management too much power.
On its first day of trading, Deliveroo lost more than a quarter of its value – wiping almost £2 billion from its opening £7.6 billion market capitalisation.
A year on, it is evident that Deliveroo has not yet learned the lesson about the importance of a strong workforce.
Deliveroo continues to fail its workers
As the cost of living crisis bites, gig workers – such as Deliveroo drivers – will be highly exposed to high inflation.
On top of a rise in general living expenses, riders must provide their own fuel, leaving them at the mercy of fluctuating petrol prices.
For many, this has led to an effective cut in income for riders – particularly those on motor vehicles.
Deliveroo uses an opaque algorithm to calculate worker pay. Over-hiring, long pick-up wait times, and fluctuating work availability have all led to highly volatile incomes for riders.
While the company says riders earn more than £10 an hour on average, a report released by the Bureau of Investigative journalism that analysed worker invoices found some workers were earning as little as £2 an hour.
Just this week, Deliveroo announced a new agreement with the workers union, GMB. But under this agreement workers are still classified as self-employed.
This means they will continue to miss out on common employment rights like holiday and sick pay, pension contributions and protection against unfair dismissal.
The lack of worker protection has not gone unnoticed by riders and the public
In light of the company’s disregard for its workers, they are speaking out.
Today, seven riders will be attending Deliveroo’s AGM to challenge the board directly on these issues.
They will be bringing their concerns to the board, and its investors, asking questions on worker pay, the app’s payer algorithm and how this impacts the pay riders take home, its agreement with GMB, along with how the company is addressing over-hiring and worker disputes with restaurants.
But it is not only riders’ who are voicing concerns about these issues.
So far, some 1,400 individual consumers have signed a petition to the company’s board, standing with riders and demanding better.
A stronger workforce makes business sense – but investors are staying silent
Deliveroo is currently operating a flawed business model.
It is the most protested platform in the world. Hundreds of protests and strikes have targeted the company’s history of poverty pay and poor working conditions.
Meanwhile, increasing case law and the upcoming EU Directive on Platform Workers will leave Deliveroo – and other gig economy companies – facing increasing scrutiny and greater regulatory risks.
In the UK, the Supreme Court ruled that Uber drivers were workers, not self-employed, and therefore entitled to protections such as minimum wage and holiday pay.
While UK court judgments have confirmed Deliveroo riders as self-employed, the general global picture shows a growing trend against classifying gig workers this way.
In fact, Deliveroo recently withdrew from the Spanish market after new legislation recognised riders as employees.
Yet, despite the growing spotlight on the company, it has been up to the rider’s themselves to bring these questions to the board. The company’s investors have so far been largely silent.
This isn’t good enough.
Investors must engage Deliveroo on workers’ rights
For those investors that did invest in Deliveroo, workers’ rights should be a top priority topic for engagement.
Investors should be engaging with the company, and the unions representing the riders themselves to fully understand the issues they face and barrier to change.
This is not only the right thing to do, but it would ensure they keep ahead of the growing push back against gig economy employers and the regulatory push against their workforce practices.
Today’s AGM offers a vital moment for investors to hear the voices of these workers and to begin a meaningful conversation with the company on these issues.
To find out more about our work engaging companies on workforce issues, please contact email@example.com