Deliveroo has been told by the government that it must pay its workers the minimum wage unless a court rules that they are self-employed. The company, which is embroiled in a pay row with its couriers, has had its proposed wage deal described by the Labour party as “Victorian”. The plans prompted hundreds of self-employed riders to protest over attempts to pay them per delivery rather than by the hour, a move which, they say, will significantly reduce their earnings.
Deliveroo has since softened its stance on the controversial new pay scheme and has offered its apologies to its staff.
Workers can now opt out of the firm’s pilot scheme to pay £3.75 per delivery, instead of the present rates of £7 an hour plus £1 a delivery and for those in the new scheme, the firm will also make sure they are paid at least £7.50 an hour at peak times.
Deliveroo had said the new pay scales were part of a pilot programme being tested by just 280 London riders, out of more than 3,000 in the capital.
Announcing the concessions, the firm’s UK and Ireland managing director Dan Warne said:
“We’ve reached out to every rider involved to gather feedback.
“We’ve listened to their concerns and offered every rider the choice to withdraw from the trial.
“For those that choose to take part in the trial we’ll also be guaranteeing fees at peak times for riders will be at least £7.50 per hour plus tips and petrol costs.”
The Department for Business, Energy and Industrial Strategy insisted that workers must be paid the “national living wage” (NLW) of £7.20 an hour unless a court or HM Revenue and Customs defines them as self-employed. It prompted DBEIS to state:
“The government is determined to build an economy that works for all – that includes ensuring everyone gets a decent wage.
“An individual’s employment status is determined by the reality of the working relationship and not the type of contract they have signed.
“Individuals cannot opt out of the rights they are owed, nor can an employer decide not to afford individuals those rights.”
Deliveroo delivers food from thousands of restaurants that do not have their own delivery service. Its clients include Pizza Express, Byron and Gourmet Burger Kitchen. The company charges customers £2.50 per delivery.
Deliveroo has insisted that the new pay deal is only being trialled in certain areas of London, with about 280 riders taking part, out of more than 3,000 in the capital. In a blogpost, it said pilots of the pay-per-delivery system have led to a doubling of average hourly fees for riders during the busiest times.
The firm said the new pay plan, which had led to driver protests, was only going to be a 90-day trial which will now be voluntary.