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Hi *|FNAME|*,

Deliveroo appears to be one of the few business success stories of the Covid-19 pandemic, as repeated lockdowns prompted a surge in online food orders.

Like millions of others, you may have used the company’s app to buy from supermarkets or order a meal from a local restaurant. In the space of 12 months the company doubled its UK couriers from 25,000 to 50,000. And right now it is in the final stages of preparing for a highly-anticipated stock market flotation which it hopes will value the company as high as £8 billion, netting chief executive Will Shu as much as £500 million in the process. 

So it's pretty shocking that our new investigation out this week revealed some Deliveroo riders earning less than the minimum wage. And even though Deliveroo did what it could to stop us getting the story out, including threats of injunctions, it failed. Since our findings hit the news across the UK earlier this week, the reaction has been huge.

Is Work Working?

The pandemic has intensified the spotlight on the so-called gig economy on which Deliveroo's business model is built. For years those who have come to rely on these freelance and often insecure jobs have been fighting, unsuccessfully, for rights such as the minimum wage and sick pay enjoyed by a traditional workforce. Recently the wind has begun to change

In February, the UK Supreme Court ruled Uber drivers are not self-employed entrepreneurs as the company had argued but workers who required statutory protection. In response, the company says it is “willing to change” and that drivers will earn at least the £8.72 National Living Wage.

Now the focus has shifted to Deliveroo and what the landmark ruling might mean for next week's public share offering and, more importantly, for the riders who have long raised concerns about low levels of pay and being beholden to an algorithm-based delivery system which they know little about.  

At this pivotal moment for tens of thousands of vulnerable UK workers, our team committed to investigate riders’ concerns. We specialise in investigations where we can collaborate with those directly affected to expose the real impact of systemic failings like insecure work on people's lives. 

The story came to us from concerned riders and we worked alongside them throughout the process - trialling out our first ever story "working group". The result? An investigation with, by and for Deliveroo riders.


Last month we also threw a spotlight on Amazon’s use of zero hours contracts in UK warehouses. As these huge companies succeed in changing consumer behaviour to re-shape the market in their own favour, we've exposed who is really paying for this new culture of convenience. When hard-working people lack security and receive little reward, we want to know: Is Work Working?

Evidencing the scale of low pay

Deliveroo had been accused in the past of exploiting its workforce, particularly with regard to low levels of pay. But media coverage of these allegations was based on the individual testimony of small numbers of riders and as such proved easy to dismiss. The company claims riders earn on average ‘well above’ the minimum wage, but only they know how the fee riders receive per order is calculated. 
 
Our investigation is different. It is based on our independent analysis of thousands of invoices submitted by hundreds of riders via an online form created by the Independent Workers of Great Britain (IWGB) union. This allowed us to reveal at scale, for the first time, what Deliveroo riders are paid and whether the company’s claims about generous fees that far exceed the national minimum wage are true. 
 
One in three of our sample made less than £8.72, the national minimum wage for those over 25, with some riders earning well below that basic threshold.

A cyclist in Yorkshire, for example, submitted invoices covering 180 hours during which they were logged into the Deliveroo app and receiving orders. During that time the rider was paid the equivalent of £2 per hour.

While this is legal - Deliveroo riders are classed as self-employed so are not entitled to earn the minimum wage - it was in stark contrast both to Deliveroo’s public statements and the vast sums chief executive Will Shu and his investors, including Amazon, are set to make. 
 
Deliveroo called our data, from more than 300 riders, unrepresentative of its 50,000-strong UK couriers, who they claim earn £13 per hour on average during peak times. But riders told us and our partners at the Mirror and ITV News that the company’s huge recruitment drive had saturated the market, resulting in fewer orders and smaller earnings. They complained about being left in the dark by technology which Deliveroo says helps them “maximise earning potential” but they say provides little clue as to how deliveries are assigned or how their fees are calculated. 
 
Crucially, labour expert Alan Bogg predicts our findings could spark change. He believes Deliveroo riders will soon be recognised as workers: “Given the evidence the Bureau Local has identified about the low levels of pay for Deliveroo riders, in circumstances where they have no control over the contractual documentation, I have little doubt now that they would be treated as workers.”
England hero Marcus Rashford to hold talks with Deliveroo as investigation has immediate impact 

The response to the Deliveroo investigation has been huge. 
 
Our findings led the ITV News bulletins at 6.15pm and 10pm. England footballer and campaigner Marcus Rashford said he would hold emergency talks with Deliveroo, which sponsors the national side and is an official partner of his End Child Food Poverty drive. Labour’s shadow business secretary Ed Miliband called on the company to “pay their workers properly” and a host of other MPs also expressed their concern. There were reports by the BBC, Guardian, FT, Mail, Telegraph and Independent, as well as specialist publications including the Grocer, Caterer and Computer Weekly. 
 
Equally as important for our project was the involvement of our local partners. The data we obtained meant members of our network were able to report what Deliveroo riders on their patches are earning and how that compares with other areas. It led to compelling coverage by outlets including The Ferret, Huddersfield Examiner, Aberdeen Press and Journal, Newcastle Chronicle, Manchester’s The Meteor, and the Evening Standard, with numerous other publications preparing stories as this newsletter went to press. 

There are also clear signs that potential investors have taken notice. Six major investment firms - Aberdeen Standard, Aviva Investors, BMO Global, CCLA, LGIM and M&G - have said they will not take part in the Deliveroo flotation due to workers rights concerns. Five of those announcements took place after our story was published. 
 
Phil Webster, a portfolio manager at BMO, described Deliveroo as a “ticking time bomb” and “uninvestible” due to the potentially huge impact extra rights for workers would have on its business model.
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Thanks,

Gareth


Gareth Davies
Bureau Local Reporter
 
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