Deliveroo is spending £10 million to equip 35,000 riders with free accident insurance, but said further benefits risk classifying self-employed workers as staff. Riders in 12 countries will be automatically enrolled in an insurance package that will cover them for up to £7,500 of medical expenses as well as up to 75% of average gross income if they are injured while working – at no cost to themselves. It is being touted as an improvement on the "exclusive" accident and personal sickness and injury cover made available to its UK food delivery riders in December for £1.85 per week, and is expected to cost the company nearly £10 million at the outset. Deliveroo said it would like to offer more benefits to drivers but risks being forced to count riders as staff rather than as self-employed workers. Chief executive and founder Will Shu said: "We know riders value the flexibility of being able to fit their work around their life, but they also deserve security if they're involved in an accident."
Two popular food delivery startups, Deliveroo and Foodora, are making their bicycle couriers work as contractors rather than as employees in Australia, allowing them to be paid as little as A 10 per delivery. According to a report by Fairfax Media, while they can be seen darting through the streets wearing Deliveroo and Foodora's T-shirts on bicycles carrying branded food delivery bags, the riders are not formally employed by the companies and are therefore being paid less than the award rate. Instead, riders are designated as independent contractors, meaning there is no minimum pay rate or minimum wage for riders. The companies are also not obliged to pay them weekend penalty rates or superannuation. According to Fairfax, the Fair Work Ombudsman said riders should come under the Road Transport and Distribution award, which pays casuals A 22.88 per hour, as well as weekend penalty rates.
Deliveroo is combating criticism of its employment practices with a new sickness and accident insurance policy for riders. Bicycle, scooter and motorcycle couriers can now access "industry-leading cover" -- supplied by Bikmo, a cycle insurance specialist, through benefits site Perkbox -- for £1.85 per week. With this, people who are unable to work because of illness or an accident can claim 75 percent of their average weekly earnings for up to 26 weeks. The average amount will be based on their gross income -- before tax and national insurance -- in the 12 months prior to the claim.
A group of food takeaway couriers working for Deliveroo are taking legal steps in the UK to gain union recognition and workers' rights. It comes after two drivers for Uber won a tribunal case in which they argued they were workers not contractors. If the couriers win, it could encourage thousands of those working in the so-called gig economy to seek to unionise and receive rights such as paid leave. Deliveroo said it was committed to providing "great opportunities". The company, which provides a delivery service on behalf of thousands of restaurants across the country, classes its riders as self-employed "independent contractors".