Deliveroo urged to pay national living wage as report finds workers paid as little as £2 per hour

Online food delivery company Deliveroo has been urged to make sure its riders are paid at least the National Living Wage (NLW) after a report found some are paid as little as £2 per hour.

Labour’s Frank Field said that while the flexible “gig economy” model worked for some of its workers, there were others who required a more “stable” system with a higher hourly rate.

The Birkenhead MP, who chairs the Commons Work and Pensions Committee, interviewed 179 Deliveroo riders for his report, which urges the firm to “guarantee” at least the NLW of £7.83 per hour “for all the time that people are logged in and available for work”.

The firm’s delivery staff numbers rose from 280 in 2014 to 37,773 in 2017, but they are considered freelance contractors rather than staff, meaning they are not entitled to the minimum wage or other entitlements like holiday and sick pay.

The firm defended its rates, saying the average worker earns more than £10 per hour.

Mr Field said: “The self-employed status and part-time nature of much gig economy work has given the labour market a flexibility that is still relatively new. Some of those workers who are keen to seize this opportunity view it as a short-term option while they develop their longer term earning power – setting up their own business, starting on an artistic career and the like.

“But for an unknown number of workers these imposed self-employment opportunities are all there is on offer, even though their need is for stable work for at least the level of the National Living Wage. It is this group that we are concerned about in this report and have been in each previous report we have published on the gig economy.

“The reform programme we outline will, I hope, be picked up by Deliveroo and the government as a means of both protecting this group while preserving the flexibility that so many riders have said they value.”

The report – Delivering justice? A report on the pay and working conditions of Deliveroo riders – was produced by Mr Field and parliamentary researcher Andrew Forsey.

It argued that the workers who want to be flexible or work a small number of hours should be allowed to “continue embracing the current model which enables Deliveroo to expand its workforce when needed”.

But it also says the firm should pay a basic NLW rate at the same time.

It said: “A minimum guaranteed level of earnings, as part of a redistribution of risks and rewards between companies and their workforce, would achieve two objectives. It would immediately protect the most vulnerable riders from extreme insecurity.

“It would also open up a vital longer term debate on how gig economy platforms should reorganise their workforce, or find ways of meeting the costs of maintaining large numbers of riders who are inevitably going to be underutilised at different times of the week in response to changes in consumer demand.”

Deliveroo said the proposals would remove the flexibility available to riders and suggested there were some “incorrect claims” in the report.

A spokesman said: “Riders choose how much they want to work and when, and are very clear they want to protect the flexibility that self-employment provides.

“Deliveroo believes more can be done to increase the security for riders while protecting their ability to be their own bosses, which is why we have introduced free, market-leading insurance for all, covering riders in case anything goes wrong.

“But we want to go further, and have called on the government to update employment rules to end the trade-off between flexibility and security and enable platforms to offer riders even more benefits without putting their employment status at risk.”

Press Association