The Guardian • Issue #2034

15,000 workers left in the lurch as Deliveroo goes under

Photo: Matt Taylor – (CC BY-NC-SA 2.0)

British food delivery platform Deliveroo announced on the 16th November that it was going into voluntary administration, claiming that “achieving a sustainable position of leadership in the market is not possible without a disproportionate level of investment which would have highly uncertain returns.”

Advisory and investment firm KordaMentha has been appointed as the administrator for Deliveroo Australia, and will now decide what Deliveroo’s creditors are owed. These creditors include the 15,000 workers who deliver for Deliveroo as couriers. Deliveroo’s couriers, like almost all gig workers, are classified as independent contractors, not as employees. This means that they are not entitled to basic protections, including the Fair Entitlements Guarantee (FEG), a government program designed to help employees recover unpaid wages when the company they work for becomes insolvent.

It is not farfetched to suggest that one of the “challenging economic conditions” informing Deliveroo’s decision to shut down its Australian operations may be the promise of greater regulation. The writing has been on the wall for quite some time now – better regulation of the gig economy is crucial. It is something that has been promised both by Federal Labor at the last federal election, and Victorian Labor ahead of the upcoming Victorian election on 26 November (see Guardian #2033: “Workers’ rights up for grabs”). In 2021, the Fair Work Commission even decided that one Deliveroo contractor ought to be classified as an employee (see Guardian # 1964: “Gig Workers Fight Back: Fair Work Commission Rules Delivery Riders Are Employees”).

The Transport Workers Union (TWU) announced on the day of the shut down that it is “seeking an urgent meeting Deliveroo’s administrators on workers entitlements and data protection.” It has represented gig workers working for Deliveroo throughout the pandemic. They cite the appalling exploitation of Deliveroo couriers as a key reason why Deliveroo cannot be allowed to simply leave without paying up:

“Deliveroo has always been the outlier of the gig industry in Australia, railing against reform supported by Uber and DoorDash to level the playing field for companies while lifting standards for workers under deadly pressures.”

And now it wants to ensure that the company does not get away with their “sudden and cowardly” departure, leaving workers with no job and thousands in unpaid wages. Deliveroo’s 15,000 workers were not even given notice of the shutdown, which happened in the middle of a work day.

Other delivery services such as DoorDash have been quick to get former Deliveroo workers to sign up. But more gig work is a band-aid solution to a much bigger problem. Some commentators fear that this may be the beginning of the end for the big food delivery companies, and that more closures are on the horizon.

But even if these companies continue to exist, which they almost certainly will in some form, they cannot be allowed to continue misclassifying, underpaying and exploiting their workers. The Albanese government has proposed reforms to enable the Fair Work Commission to consider cases that relate to “employee-like” situations, where it is currently limited to considering matters which relate to employees and those who seek clarification about whether they are an employee or a contractor. This could usher in a new era of regulation for gig work.

However, the gig economy is not an issue that can be tackled meaningfully on a case-by-case basis. Ultimately, as the TWU has already recognised, gig workers are workers and the gig economy is a union issue. Work must be done to empower gig workers to organise and bargain with the big platforms to ensure that fair pay and conditions are implemented and enforced. This includes safe conditions of work and data protection for users of delivery apps.

The solution is not, as one columnist in the Sydney Morning Herald asserted, for individual consumers to stop using delivery apps. This kind of argument diverts responsibility away from the companies who engage gig workers. It is Deliveroo, and not the users of its services, that bears responsibility for the conditions of its workers. It is Deliveroo, and ultimately other companies like it, who must be held accountable.

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