In what could be a “preview of coming attractions” a wildcat strike broke out in London earlier this month at the food deliver service Deliveroo. While not a big player in the U.S., Deliveroo uses couriers to transport hot food from restaurants that can’t afford their own delivery staff to customers in France, Germany, Belgium, Holland, Ireland, Italy, Spain, Hong Kong, Dubai, Singapore, Australia and London.
It’s a big business – last year had revenues of more than £100 million and has recently secured a round of funding of $209 million to support expansion.
The company Until was paying its drivers £7.00 an hour plus £1.00 for each delivery. Without warning, however, the company announced that it was changing the payment system. Rather than a guaranteed hourly rate, couriers would be moved to a piecework rate of £3.75 per job. As reported by Techworld, “Deliveroo dressed the announcement in the language of the entrepreneurial startup: this new schema would enable ‘flexibility’ and perhaps they might even earn more than they’d been earning before”.
Needless to say, the workers were not amused. They would no longer have a guaranteed income and would be competing for jobs during peak ordering hours with couriers who had previously been co-workers. In London, where Deliveroo has its headquarters, more than 100 of its staff went on strike. The strike lasted about two weeks, and end the end the workers got their guaranteed pay back, but as Techworld reported the strike had some broad implications:
The disruption and public outrage not only forced Deliveroo’s hand, it also led the government to consider intervening: most of this new economy depends on shifting the expenses of employment onto the employees who are counted as ‘self-employed’. But the government has said if staff are de facto working for one company then they are not self-employed, they are employees, and should be paid the national minimum wage.
This could have wider implications for collective bargaining in general in this new economy. The big unions have so far struggled to represent workers in the gig economy, specifically because workers are counted as self-employed. The general union GMB, for instance, had some difficulty in fighting on behalf of Uber drivers who are self-employed according to their contract. But that perception now seems to be shifting. It is, in fact, vital that workers who are paid through these (frankly, quasi-rentier) businesses have their employment rights enshrined, including the right to collective bargaining.
What is striking about this whole fiasco is that Deliveroo management thought they could get away with it in the first place. Did they think their workers would just passively accept the loss of guaranteed pay for the work they do? It was essentially a transparent transfer of risk from the company to the worker but they clearly found a line they should not have crossed. There was a certain “pearls before swine” attitude to their rate change announcement that is exactly the kind of galvanizing incident that starts unions in the first place. It is unlikely that other large companies will make the same mistake, and that is also a danger. Employment rights can also be lost more gradually by companies that are just a bit more clever.