On-demand food delivery startup Deliveroo has stepped back from trying to force a new payment contract on its existing riders in London, after a group organized protests against a planned trial of a new payment model due to kick off tomorrow.
The new payment model seeks to switch riders from the £7 per hour plus £1 per delivery rate they currently earn to a fixed fee of £3.75 per delivery.
Protesters had argued the structure could see them working for nothing at certain points of the day, as well as risking safety by encouraging more haste to pack in a greater number of deliveries per hour.
Although also initially only slated as a trial — limited to five delivery areas in London — Deliveroo was asking all its riders sign new contracts reflecting the new payment model.
Riders unhappy with the proposed changes, and the requirements being placed on them as a result of the trial, organized protests — including picketing Deliveroo’s head office in London — dragging the media spotlight onto co-founder William Shu who came out to publicly defend the company’s actions, including answering some awkward questions on the BBC’s flagship radio news program, Today…
The debate even generated a verbal intervention from the UK government, with a spokesperson for the Department for Business, Energy and Industrial Strategy commenting that companies cannot shirk their responsibility to pay the UK’s National Minimum Wage (of £7.20 per hour). (Albeit the protestors were actually calling for Deliveroo to pay a higher London Living Wage, of £9.40/hour.)
As is typical with gig economy platforms Deliveroo does not employ (in a legal sense) the grassroots workforce who make the deliveries via its platform — but rather defines them ‘independent contractors’ who are offering their services via its tech platform; a structure that of course makes it far harder for workers to organize collective industrial action or negotiate better pay and conditions.
Even so, the Deliveroo protestors appear to have achieved some concessions in this instance via their ad hoc protest, looping in the Independent Workers Union’s Couriers & Logistics Branch to help with organization and PR.
They also turned to crowdfunding to finance their protest — which they dubbed a strike. At the time of writing the strike fund has raised more than £12,700, from close to 1,000 donors, although the protestors are now telling the public to stop giving donations as they are intending to go back to work during the trial now that Deliveroo will not force them to sign new contracts.
Other concessions made by Deliveroo over the course of the protest include not forcing drivers to switch to the new payment model, as they initially said riders in the trial zone would have to. Riders can now opt out, although if they do that they will still have to move zones — but Deliveroo has said they will only be asked to move to a neighboring zone, “no more than two miles away”.
The company also added some payment guarantees to the new model during peak times to try to reassure riders their earnings will not be negatively impacted by the change. Initially there had been zero guarantees, with payment purely tied to completed deliveries.
Deliveroo’s original requirement that existing riders sign a new contract was branded heavy-handed by the protestors, who argued that if the trial was really a trial — not a foregone conclusion — the company should not be requiring them to agree to new terms before the start of it.
That argument appears to have won the day, although what happens after the 90 day trial period comes to a close and the company assesses the success of the new pay structure remains to be seen. (According to a report in The Guardian it is already signing new riders onto the new contract.)
Writing in a blog post detailing the latest Deliveroo concession late yesterday, Shu said: “Signing the new pay-per-delivery service agreement will not be compulsory during the trial — if riders want to continue working in their zone under the pay-per-delivery trial to see how it works for them, they can do so.”
“This is a trial -– a chance to try something new, to work with our riders to find out if it’s an improvement or not, and iterate from there. Trials of this scheme in other locations have proved a success and feedback from riders has been positive, that’s why we have continued to trial this new programme,” he added.
The trial itself is “continuing as planned”, according to a Deliveroo spokesman.
Earlier this month the company closed a $275 million Series E round of funding — which we reported as valuing Deliveroo at close to $1 billion.