As Deliveroo prepares for a multibillion-pound stock market flotation that could net its chief executive as much as £500m, an investigation by the Bureau of Investigative Journalism has found that a third of the riders whose data it collected were receiving less than the minimum wage.
Deliveroo has said riders are paid more than £10 an hour on average, but analysis of thousands of invoices showed more than half of the couriers were paid less than that, and one in three made less than £8.72, the national minimum wage for those over 25. Some earned even less: a cyclist in Yorkshire worked 180 hours and was paid the equivalent of £2 per hour.
"These findings raise concerns," said Tom Powdrill, head of stewardship at the Police Investigations & Review Commissioner (PIRC).
"Investors considering taking a position in Deliveroo should familiarise themselves with these matters and the risks and responsibilities involved along with all other relevant factors. Challenges to the current employment model are financially material."
Deliveroo has more than 100,000 riders in 12 countries but the group has revealed it is involved in legal proceedings regarding the classification of its riders in the UK, France, Spain, the Netherlands and Italy. Its riders are currently classed as independent contractors, however should the group be forced to classify riders as employees, entitling them to minimum wage and paid holidays and sick leave, the company said the business would be "adversely affected".
The Supreme Court ruled last month that Uber's drivers must be classed as workers, although Uber said this did not relate to its Uber Eats restaurant delivery riders.
"Given the evidence the Bureau 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," said professor of labour law at the University of Bristol Alan Bogg.
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."
Deliveroo also told the Bureau: "Riders do not work in hourly patterns, and time logged on does not mean they are working: riders are free to reject work without penalty at any time and can work for other companies while logged in to our app. Almost half of orders are rejected at least once."