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Deliveroo CEO apologises after new staff pay scheme is compared to Victorian Britain

William Shu said Deliveroo riders have the option to join the new trial scheme or stick with the existing arrangements

Zlata Rodionova
Monday 15 August 2016 11:04 BST
Next year, Deliveroo aims to make the technology available to all 25,000 restaurants that use its app
Next year, Deliveroo aims to make the technology available to all 25,000 restaurants that use its app (Getty)

William Shu, the co-founder and chief executive of takeaway delivery firm Deliveroo, has apologised for allowing the pay dispute between its couriers and the firm to escalate, saying Deliveroo couriers were the “life-blood” of the company.

Deliveroos’ new proposed pay deal has been branded as a “return to Victorian Britain” by the Labour party.

The Department for Business, Energy and Industrial Strategy also waded into the dispute between Deliveroo and its couriers on Sunday, insisting the firm must pay its workers the minimum wage unless it reaches agreement in the courts to treat them as self-employed.

The Government stepped in after Deliveroo riders held a protest outside the company headquarters in central London over their new pay rates, last week.

William Shu, the founder of the company, today apologised. “I am very sorry that things have gotten to this point. Our riders are the life blood of our company, without them we have nothing,” he told the BBC’s Today programme.

Mr Shu said he expects Deliveroo couriers to earn more money under the new pay arrangement, which pays them £3.75 per delivery. This compares to the old pay plan which saw couriers making £7 an hour plus £1 per delivery.

“Under the new scheme we expect delivery riders to make more, and this is in response to one rider concern which was flexibility. The new per-drop pay scheme allows them to log in and log out as they please to work as little or as much as they want,” Mr Shu said.

He added that riders have the option to join the new trial scheme or stick with the existing arrangements.

Mr Shu denied riders were under pressure to get deliveries quickly, saying he worked as courier himself for the first nine months after the launch of the company.

"We want people to perform well but they are under no pressure to go at a certain speed or anything like that,” he said. "I was a rider every single day myself for seven days a week for the first nine months, eight hours a day – I know exactly what it's like."

A spokesperson at Deliveroo said: "The 2.2km size of each delivery zone has been designed with delivery distance and time in mind. Following extensive testing this zone size was found to be the optimum size for ensuring that our riders can complete orders safely and with plenty of time, while still receiving competitive fees.

"We work collaboratively with our rider community as we continue to grow, developing our service with consideration for direct feedback from riders. We also operate a full rider support service to ensure that riders can always easily contact us with any questions or concerns. We've partnered with two road safety charities Brake and Road Safety GB, who work with our riders on training and health and safety."

The Independent Workers Union of Great Britain, which was working with the protesters, said the new rates did not account for the time spent waiting for orders.

“When drivers are waiting for a delivery, this is work, because drivers are providing a service to Deliveroo. They are ‘on call’ just as any other tradesperson is, who receives payment for that time,” the union said.

“The new piece-rate creates an absurd set of incentives for work. It will disproportionately benefit the faster drivers and will inevitably incur risk,” it added.

Deliveroo, which has raised $275m (£212m) from angel investors this month, has said it will enforce the pay terms from next week and claimed that couriers had responded positively in early trials. The company has 6,000 riders across the UK and 3,000 in London.

The National Living Wage of £7.20 for everyone aged over 25 years old – hailed as the new minimum wage – was announced by then Chancellor George Osborne in April this year. Yet nearly 200 employers have been recently named and shamed for failing to pay that minimum wage to their workers.

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