In its stock market debut, British food delivery firm Deliveroo saw its share price tank around 30%.
Questions now materialized over workers’ rights for its riders.
In the days running up to the listing, the company revised its share price. Some investors opted to avoid the IPO over these concerns.
Deliveroo is just one example of a wider “gig economy” that is coming under increasing scrutiny.
In recent weeks, the industry has been rocked by a slew of court rulings and regulatory moves around Europe.
That could ultimately upend the business model.
Last month, Uber’s loss in the U.K. Supreme Court forced the company to reclassify 70,000 of its British drivers as workers.
Uber gave them a minimum wage, paid vacation time, and pension plans as a result.
In Spain, legislators have introduced a raft of measures to recategorize gig workers as employees with formal contracts and benefits.
All the while, the European Commission, the EU’s executive arm, is thrashing out plans for some regional reform on gig economy workers.
As well as their status and their rights.
James Farrar of the App Drivers and Couriers Union, which took the case against Uber in the U.K., said there had been some “early triumphalism.”
But that this is only the beginning of a turning tide in gig economy worker rights.
“The government is still reaching for the bottom rung here, and we’re not there yet,” Farrar stated.
“What was really significant about the Supreme Court ruling is it opened up space for other claims across the gig economy to succeed.”
This ruling was also implemented in Spain, making Uber drivers’ employees get the benefits and a fixed minimum wage.
Preparing for Change
Other companies are preparing for a change in some form, whether instigated by regulation or on their own volition in advance.
Just Eat Takeaway, Europe’s biggest online food delivery firm, moves its Just Eat delivery riders to employment contracts. Before the companies’ merger, the original firm’s riders called Takeaway.com were on such contracts.
“As part of this model, couriers are entitled to an hourly salary. They are paid above minimum wage, provided with employment insurance and social security, in line with local legislation,” a spokesperson said, adding that couriers are provided with equipment like bikes.
In Spain’s case, operators in the market like Glovo are waiting to see how exactly the legislation will pan out and how to respond.
Co-founder Sacha Michaud is not a fan of the route that Spanish lawmakers have taken.
“It’s quite a strict regulation, probably the strictest (in Europe), so it’s quite a radical position in the sense that it allows very little flexibility, which is one of the things that we obviously adhere to, and the riders are asking for that as well,” Michaud stated.
Michaud said Glovo would “obviously adapt to the regulation” when it is in effect but said the company is more in favor of a middle ground between worker flexibility and providing benefits and security, all while avoiding the employment tag.
He added that surveys carried out on Glovo’s riders showed that most prefer a flexible model rather than stricter employment. He said this helps many riders who may be working for gig platforms between their studies or other jobs.
“It should be social rights, yes, and see how we can maintain flexible working conditions under that. It doesn’t necessarily have to be black or white.”