On Friday Deliveroo will have its first annual general meeting (AGM), 14 months after the company floated on the London Stock Exchange in what was dubbed the ‘worst IPO in history’. Numerous mainstream investors boycott the offering last year, objecting to the company’s ownership structure as well as concerns over its treatment of workers and exposure to regulatory risk.
These concerns have not gone away. Indeed, with increasing case law and the upcoming EU Directive on Platform workers, companies in the gig economy face greater regulatory risk than ever. Indeed, Deliveroo recently withdrew from the Spanish market after new legislation recognised riders as employees.
The AGM also comes a week after Deliveroo’s controversial deal to recognise the GMB union as the sole trade union representing its riders. The agreement “recognises that Deliveroo riders are self-employed (meaning riders are not entitled to worker benefits such as minimum wages or sick pay) following a series of UK court judgements which have confirmed this status”.
While it is true that the Court of Appeal found in favour of Deliveroo on this matter, the general global picture on legal rulings shows a trend against classifying gig workers as self-employed. This includes a UK Supreme Court ruling in February that Uber drivers are workers, not self-employed contractors.
Despite these controversies and risks, investor engagement on Deliveroo’s working practices appears to be non-existent. Rachel Hargreaves, Senior Project Officer at ShareAction, said:
“Last year many investors abstained from investing in Deliveroo over concerns about worker’s rights. For those that did invest, workers’ rights should be a priority topic for engagement. Not only is this the right thing to do, but Deliveroo’s current business model poses a risk to investors – including increased risk of litigation and strikes. The absence of investor engagement on this issue is thus as surprising as it is disappointing.”
Nonetheless, the absence of investor scrutiny does not mean that the company will get an easy ride at its AGM on Friday. A number of riders will be attending the AGM as proxies for shares held by responsible investment campaign group ShareAction, and putting their questions on pay and the GMB deal directly to the board of directors.
The questions include the following pre-submitted questions, as well as several others that will be asked on the day:
“In March of last year, just before the IPO, the Bureau of Investigative journalism released a report where they analysed rider invoices and determined that some riders were earning as little as £2 an hour. Deliveroo has responded that riders earn more than £10 an hour on average. However, the income of gig workers is complicated and affected by a variety of factors acknowledged in your annual report. These include fees, volume of work, waiting times, boosts and expenses. I would like to ask the board to commit to providing a more detailed breakdown as to how you’ve arrived at the £10 figure? And will you commit to providing these breakdowns on an ongoing basis?”
“Gig workers are immediately exposed to high inflation with regards to their work expenses, particularly petrol prices, as well as with their general living expenses. This has led to an effective cut in income for all riders, and particularly those in motor vehicles. You claim to be monitoring this closely. Could the board please explain how they monitor this and what costs do the company calculate that riders incur? And do these factor into how fees are currently set, and if not, can riders expect a rise in fees to compensate?”
“I have seen the news that Deliveroo has entered a voluntary partnership agreement with GMB. Whilst I believe worker representation is essential, previously Deliveroo has spent hundreds of thousands of pounds fighting collective bargaining cases in UK courts and has not engaged with riders who are part of the IWGB union. Why has Deliveroo suddenly embraced voluntary trade union partnership with GMB?”