Exploited Deliveroo bike couriers (‘riders’), organised by the Independent Workers’ Union of Great Britain (IWGB), are set to go on strike tomorrow, Wednesday 7 April, to demand better pay and basic workers’ rights. This action will coincide with the company going public on the London Stock Exchange.
The COVID-19 pandemic has ravaged the wider economy and working-class communities. But it has proved to be a godsend for Deliveroo, which was previously struggling. The food delivery app posted losses of £317.7m in 2019, and was forced to take out a loan of £198m to stay afloat.
But with millions of households relying on home deliveries during lockdown, provided by around 50,000 casually employed couriers, the company has turned its fortunes around.
Deliveroo was also helped in no small part by a cool $575m investment from Amazon – another company that has made a killing from the pandemic. This act of monopolistic collusion led to a lengthy and expensive investigation by the UK’s competition authorities.
Profits and exploitation
Deliveroo has a predicted valuation of £8bn on the stock exchange. And it has been estimated that CEO Will Shu will net £500m, with senior managers and investors also in line for a hefty bonus.
The company’s obscene profits have been squeezed out of thousands of severely exploited Deliveroo riders, who have literally risked life and limb to keep people fed during the pandemic.
The infamous food delivery firm is one of the biggest players in the so-called ‘gig economy’ – a highly exploitative model of bogus self-employment, involving around 4.7 million workers, where people undertake casual shift work for low pay. Basing itself on this model, Deliveroo relies on a high volume of deliveries to secure its profits.
Deliveroo does not pay its riders a fixed rate; instead, couriers only get paid for making a delivery. And because these workers are classified as self-employed, the company is under no obligation to provide sick pay, holidays, or a minimum wage.
A recent study into thousands of invoices has revealed that a third of Deliveroo drivers earn less than the minimum wage of £8.70 an hour.
Under pressure to make fast deliveries, Deliveroo riders are at serious risk of injury on the road. A study by UCL found that 47 percent of riders felt forced to drive over the speed limit, and 10 percent had experienced or heard of a colleague being injured.
This is on top of the risks that go with being on the frontlines of the pandemic.
Such exploitation and mismanagement is typical for casually employed food couriers across the world, who enjoy very little in the way of rights or protections.
For example, in Turin, Italy, local restaurant managers scammed hundreds of immigrant riders using the platform UberEats out of thousands of euros in tips and delivery payments.
Despite UberEats having full access to their employees’ invoices and logged hours, this money was not returned.
Court victory and IPO disaster
Deliveroo bosses previously spent millions defeating a court case lodged by the IWGB to give riders the right to engage in collective bargaining in 2018.
The union won a major victory in November last year, however, when the High Court ruled that gig economy workers must now receive the same health and safety protections as those legally classified as ‘employees’.
This means riders have the right to be provided with personal protective equipment by Deliveroo, along with the “right to stop work in response to serious and imminent danger”.
This victory caused Deliveroo bosses a headache over the upcoming commencement of public trading. Investors became spooked at the company potentially having to sacrifice some of its profits in order to provide its workers with basic rights.
This led Deliveroo to assure fat-cat investors that the union is a “fringe organisation” and “the number of IWGB members that are Deliveroo riders is a tiny minority”.
However, the company faced a disastrous initial public offering (IPO) – described as “the worst in London’s history” – with shares closing last Wednesday at 287p: 26 percent down, wiping £2bn from its opening £7.6bn market capitalisation.
Many factors (including short selling and bad share pricing) explain this catastrophe. But pressure from organised workers and the recent court ruling certainly played a role in this expensive embarrassment for Deliveroo’s bosses – and for the Tory government, who hope to make post-Brexit Britain a trading haven for big tech companies.
"The dramatic failure of London’s biggest tech IPO is likely to damp hopes of the British government to attract other high-growth companies to list in the UK" - Disaster strikes as Deliveroo becomes ‘worst IPO in London’s history’ https://t.co/GGIOZuPVVi via @IrishTimesBiz— Noel Donnellon (@NoelDonnellon) April 2, 2021
Solidarity with the riders!
Socialist Appeal offers its full support and solidarity to the IWGB and Deliveroo couriers in their strike action.
There’s nothing more horrifying than seeing investors and senior managers lining their pockets, whilst their employees earn less than minimum wage.
Even more galling is the fact that these food couriers – hypocritically classified by the government as ‘essential workers’ – have been part of the backbone of society during the pandemic, providing a vital service in tough circumstances. Yet they only have derisory wages to show for it.
Instead of this rotten setup, ‘gig economy’ platforms like Deliveroo and Uber should be taken into public ownership, and run under democratic workers’ control. This is the only way to guarantee decent wages and conditions for workers; and to ensure that these important services are provided on the basis of society’s needs, not investors’ profits.
The labour movement should boldly put forward this demand, whilst offering their full support and solidarity to the Deliveroo riders’ strike.
This should be linked to a mass drive by the trade unions to organise workers in the gig economy; and to a determined campaign by the Labour Party in defence of workers’ rights, and for a clear socialist economic programme.
The fact is that workers are the source of all value in society. The capitalists, meanwhile, are parasites – creating nothing, while sucking the blood of the majority; profiting from the exploitation of millions of precarious workers.
Enough is enough! Victory to the Deliveroo riders!