Grocery delivery riders could soon be reclassified as employees in a move set to have major ramifications for the like of Deliveroo, Uber and Just Eat Takeaway.
US labour secretary Marty Walsh told Reuters in an interview published yesterday that “a lot of gig workers should be classified as employees”.
The news sent shares in Uber, Lyft and Doordash dropping around 10 per cent as investors saw that Walsh’s views could have major implications for the gig economy model across not only the US, but the globe.
According to figures from the International Labour Organisation, a whopping 43 per cent of workers in the US were gig workers.
This also saw shares in Deliveroo, which have largely recovered since its disastrous IPO a few weeks ago, begin to drop once again.
One of the key reasons investors shunned Deliveroo’s stock offering over fears that the gig economy on which it relies was entering a period of significant upheaval.
Just days before Uber, which pioneered the gig economy model, announced that it would class all 70,000 drivers in the UK as workers.
Deliveroo riders was also encouraged to hold a strike on the day it went public following a damning report which showed many riders made less than minimum wage.
While Deliveroo doesn’t operate in the US, its riders will be watching developments in the US closely, piling pressure on chief executive Will Shu to follow in Uber’s footsteps.
Earlier this week Waitrose announced that it was quadrupling the number of stores offering 20-minute delivery with Deliveroo creating 400 new jobs to support the expansion.
Deliveroo and Waitrose announced a new two-year partnership following a successful trial which has been running since September last year, reportedly helping attract new younger customers to the brand.
It came just days after Sainsbury’s made a similar announcement, expanding its partnership with both Deliveroo and Uber Eats, both of which have become a significant presence in grocery delivery during the pandemic.