Deliveroo faces row over workers’ rightswritten by Bella Palmer
This week, both Aviva Investors and Aberdeen Standard said they would not be backing the IPO, citing workers’ rights as an issue
Deliveroo was today fighting to keep its £8.8 billion stock market flotation on track as two of the UK’s biggest investors said they would not be investing due to worries about workers’ rights and a union-backed survey said some riders got just £2 an hour.
The company strenuously denied its workers were paid so badly, declaring the data gathered by the Bureau of Investigative Journalism and the IWGB union.
However, it added to the controversy around the company which refuses to grant its riders employee status as Uber has just done for its drivers.
This week, both Aviva Investors, which has £365 billion of the public’s assets under management (AUM), and Aberdeen Standard, with £460 billion, said they would not be backing the IPO, citing workers’ rights as an issue.
Deliveroo today said: There has been a strong investor interest in our planned IPO and we are already backed by some of the most respected global tech investors.
Deliveroo, like Uber Eats, says its riders are rightly designated as self-employed because they are free to work for others and refuse jobs if they want. It says its riders earn £13 an hour on average during busy times.
Deliveroo has defeated two High Court battles challenging its view but its IPO prospectus warns of investigations across Europe and said it may have to rewrite its business model if it was forced to provide riders with holiday, sick pay and minimum wages.
The Government has not intervened in legislating on the so-called gig economy despite having said it would last year, leaving the legal situation unclear.
Deliveroo’s existing investors before the IPO include Fidelity, which declares on its website that environmental, social and governance (ESG) issues are a key part of its investment process.
Fund managers are increasingly finding their investors, from individual members of the public to the trustees of companies’ pension funds, are no longer willing to support companies without an ethical purpose.
Conditional dealings for the IPO start on March 31 with full dealing of the shares on 4 April.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.