[UK] Deliveroo share price leaps after self-employed drivers ruling

Food delivery platform Deliveroo has received a welcome boost to its shares following a UK appeals court ruling which determined that its riders are self-employed, Bloomberg reports.

Rival gig economy giant Uber Technologies Inc. lost a similar case earlier in 2021 so the decision is a positive outcome for the contentious labour model

Shares of Deliveroo Plc in London jumped after the ruling. In the run-up to the company’s disappointing March initial public offering, Deliveroo’s reliance on gig workers drew criticism from investors and riders. The company said the unanimous court decision on June 24 dismissing an appeal from the IWGB labour union affirmed its aim to offer couriers full flexibility.

“U.K. courts have now tested and upheld the self-employed status of Deliveroo riders four times,” Deliveroo said in an emailed statement.

The decision comes in the wake of a Supreme Court ruling that Uber’s drivers must be treated as “workers,” only months before. The legal status grants people rights such as a guaranteed minimum wage and paid holiday. That ruling was reportedly largely based on the control Uber exerted over its drivers, including their ability to log them out of the app.

Shares in Deliveroo had increased as much as 6.3 per cent by 1 p.m. in London on the day of the ruling, the biggest leap since April 12.

The appeals court did consider the Uber ruling but decided it wasn’t relevant to this case. The Deliveroo suit is concerned with riders’ ability to unionise, Uber’s case centred on the worker rights drivers were entitled to under UK employment law.

Judge Peter Coulson said that the ruling may seem counterintuitive because “it may be thought that those in the gig economy have a particular need of the right to organise as a trade union.”

“I quite accept that there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate,” Judge Coulson said, leaving a window open for other potential claims involving gig economy workers.

“The Court of Appeal has emphatically upheld the findings of the High Court, even after considering the effect of the recent Supreme Court decision” in Uber that found that Uber drivers were workers, Colin Leckey - a lawyer at Lewis Silkin, Deliveroo’s representatives in the case - said.

However, according to Joe Aiston - an employment lawyer at Taylor Wessing who wasn’t involved in the case - the problem of how gig workers can collectively bargain isn’t going away.

“At a time when wildcat strikes and negative publicity via social media have the ability to strike at an employer’s commercial interests, the power is arguably to be found in the way businesses treat staff and manage their reputation,” he said.

The IWGB said it would continue to evaluate its legal position and work towards collective representation at Deliveroo.

Source: Bloomberg

(Links and quotes via original reporting)

Food delivery platform Deliveroo has received a welcome boost to its shares following a UK appeals court ruling which determined that its riders are self-employed, Bloomberg reports.

Rival gig economy giant Uber Technologies Inc. lost a similar case earlier in 2021 so the decision is a positive outcome for the contentious labour model

Shares of Deliveroo Plc in London jumped after the ruling. In the run-up to the company’s disappointing March initial public offering, Deliveroo’s reliance on gig workers drew criticism from investors and riders. The company said the unanimous court decision on June 24 dismissing an appeal from the IWGB labour union affirmed its aim to offer couriers full flexibility.

“U.K. courts have now tested and upheld the self-employed status of Deliveroo riders four times,” Deliveroo said in an emailed statement.

The decision comes in the wake of a Supreme Court ruling that Uber’s drivers must be treated as “workers,” only months before. The legal status grants people rights such as a guaranteed minimum wage and paid holiday. That ruling was reportedly largely based on the control Uber exerted over its drivers, including their ability to log them out of the app.

Shares in Deliveroo had increased as much as 6.3 per cent by 1 p.m. in London on the day of the ruling, the biggest leap since April 12.

The appeals court did consider the Uber ruling but decided it wasn’t relevant to this case. The Deliveroo suit is concerned with riders’ ability to unionise, Uber’s case centred on the worker rights drivers were entitled to under UK employment law.

Judge Peter Coulson said that the ruling may seem counterintuitive because “it may be thought that those in the gig economy have a particular need of the right to organise as a trade union.”

“I quite accept that there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate,” Judge Coulson said, leaving a window open for other potential claims involving gig economy workers.

“The Court of Appeal has emphatically upheld the findings of the High Court, even after considering the effect of the recent Supreme Court decision” in Uber that found that Uber drivers were workers, Colin Leckey - a lawyer at Lewis Silkin, Deliveroo’s representatives in the case - said.

However, according to Joe Aiston - an employment lawyer at Taylor Wessing who wasn’t involved in the case - the problem of how gig workers can collectively bargain isn’t going away.

“At a time when wildcat strikes and negative publicity via social media have the ability to strike at an employer’s commercial interests, the power is arguably to be found in the way businesses treat staff and manage their reputation,” he said.

The IWGB said it would continue to evaluate its legal position and work towards collective representation at Deliveroo.

Source: Bloomberg

(Links and quotes via original reporting)