A third of Deliveroo riders are paid less than minimum wage according to a damning new investigation which is already threatening investor confidence ahead of its IPO.
Deliveroo, which employees more than 100,000 riders across 12 countries, is reportedly paying some riders in the UK as little as £2 an hour.
According to a new report from the Bureau of Investigative Journalism, which analysed thousands of invoices from couriers across the UK, one in three riders made less than £8.72 an hour, the national minimum wage for workers over 25.
While Deliveroo says that its riders are paid more than £10 an hour on average, the analysis revealed that more than half were paid less.
It comes as Deliveroo prepares to launch an £8.8 billion IPO on the London Stock Exchange, promising to be the largest London float in a decade.
However, reports of the mistreatment of workers is already causing disquiet among major city investors.
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Aviva Investors, one of the UK’s largest fund managers, said they were turning down the chance to invest in Deliveroo when it goes public.
“If they are classed as riders they don’t necessarily get basic rights for minimum wage, sick leave or holidays, and (Deliveroo) states a reclassification of employees as an investment risk to the business,” Aviva Investors chief investment officer of equities David Cumming told the BBC.
“We won’t be investing in Deliveroo for a number of reasons but that is one of them…A lot of employers could make a massive difference to workers’ lives if they guaranteed working hours or a living wage, and how companies behave is becoming more important.”
The rights of gig-economy workers such as Deliveroo’s have been thrown into the spotlight recently after Uber, which pioneered the gig economy model, announced it would give all its UK drivers the same rights as workers.
This has sent shock waves through the sector as riders across the world demand similar rights, with all eyes on Deliveroo.
A Deliveroo spokesperson said: “Deliveroo riders have the complete freedom to choose when and where to work and can choose which deliveries to accept and which to reject. 50,000 riders choose to work with Deliveroo, and thousands more people apply to work with us every week.
“Our way of working is designed around what riders tell us matters to them most – flexibility. Riders in the UK are paid for each delivery they choose to complete and earn £13 per hour on average at our busiest times.”