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Update: As Deliveroo’s founder backtracks, the on-demand economy’s workers’ rights problem continues

Last week’s protest by Deliveroo couriers at the imposition of a new pay structure has taken significant shine off a momentous seven days which have seen it reach the vaunted unicorn status after raising a massive $275m Series E roundlast week.

A smattering of the firm’s riders in London, ‘hundreds’ according to the BBC but just 40 according to the startup itself, camped outside the delivery firm’s Soho headquarters on Thursday and Friday to voice their disquiet at a new wage structure which they argue will put them out of pocket.

Beginning this week, the tech startup had plans to begin trialling a new system whereby couriers will be paid £3.75 per delivery in contrast to the current arrangement where riders receive £7 per hour plus £1 per delivery.

Miffed workers have argued that this will seriously impact their take home pay and make it impossible for them to make as much as they do under the current system.

Such has been the clamour that even the Deparment for Business, Energy and Industrial Strategy was forced to step in on Sunday and claim that Deliveroo must pay its riders the national living wage of £7.20 per hour, unless a court or the HMRC rules them to be self-employed.

Now the startup has claimed that even if the trial, which involves 280 of its 3,000 London couriers, proves succesful that its riders will be able to choose between adopting the new system or perservering with the current model.

Chief Executive Officer and Co-Founder William Shu has also been forced into a climbdown, apologising to its workforce for the controversy and expressing regret that the issue had been allowed to rumble on for so long.

Speaking to the BBC’s Today Programme on Monday, he said: “I’m very sorry things have gone to this point. Our riders are the lifeblood of our business and without them we are nothing.”

Casual work or cheap labour?

The London delivery firm has been here before of course, as early as last month it faced criticism after imposing a condition in rider contracts expressly forbidding workers from challenging their status as self-employed workers at employment tribunals.

In doing so, the firm is attempting to stave off one of the lines of attack that rideshare giant and fellow on-demand compatriot Uber is currently facing in the capital, as a group of its drivers have taken the US firm to an employment tribunal in effort to be officially recognised as workers at the company.

At the heart of these issues is the status of self-employed workers and their rights, or lack of, in the eyes of employment law, and whether they can even be deemed to be ‘self-employed’ in the first place.

Both Deliveroo and Uber argue that their riders and drivers work on a casual, self-employed basis, which means they do not have to provide the same protections or even meet the national living wage requirement that would be due to fully contracted workers.

In marketing materials, Uber posits itself as an ideal side job for people looking to boost their monthly income while Deliveroo sells itself as flexible work that helps its couriers stay fit.

To back this up, the ridehailing giant published statistics earlier this year which found that 68% of its drivers in London did not work any set hours while 51% have another source of income, as it attempted to defend itself against charges of unfair treatment and underpayment.

Regardless, the issue of worker’s rights in the new on-demand, ‘gig economy’ is something that is going to rumble on with Uber’s current employment tribunal case set to be a landmark for the industry.

What’s the answer?

The rise of casual, contracted labour has been widely-touted as the future of employment; freeing workers from the traditional 9 to 5 routine and giving them greater control over when and where they work.

In reality, if the early experiments in this nascent industry are anything to go by, it merely makes people slaves to the incessant buzz of a pan-national tech company’s app and non-existent employment protections.

As more traditional services and industries become ‘Uberfied’, there needs to be a debate about the social and ethical consequences of such innovations and the responsibility of the companies involved to look after their legion of workers, whilst at the same time not hampering the very innovations that these tech firms bring to the table.

Change may be unleashed by the various claims and cases currently making their way through employment tribunals and courts around the world, or it may not.

For true change to come about in the sector the tech firms involved, Deliveroo and Uber amongst them, will have to start putting the needs of their ‘casual’, ‘contract’ workers above the cat calls of their shareholders and backers.

Unfortunately, despite Shu’s backtracking on Monday, that does not seem like something that is going to happen any time soon.

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