Deliveroo’s position in the gig economy is quite predictable, primarily in the sense that they are in danger of becoming a company that risks burning very brightly but not for very long. Deliveroo is much less financially secure than companies such as Uber, and has spent the last two years drifting from crisis to crisis. After being caught off guard by Covid lockdowns, they were forced to plead to the Competition and Markets Authority to allow Amazon to take a 16 percent stake to the tune of £575 million. This move had previously been blocked before the company revealed that without said investment it would go bust.
After this Deliveroo lost more than a quarter of its market value when they went public, with their Initial Public Offering being dubbed the “worst in London’s history“. With draft EU legislation that means all of their workers on the continent could be reclassified as employees rather than self-employed independent contractors, and their recent cut to their forecasted sales, Deliveroo’s position in the global economy is looking precarious.
For Deliveroo riders in the UK little schadenfreude can be found in the flailing moves of executives, nor can they find hope from changing laws on the continent. The Court of Appeal ruled against the IWGB union in confirming Deliveroo riders’ self-employed status last year. The result of this was that things like riders’ sick pay and maternity leave remain covered only as much as Deliveroo wishes – with the former being £35 a day for up to 15 days (compared to Statutory Sick Pay which lasts for 28 weeks), and the latter being a one-off payment of £1000 (as opposed to Statutory Maternity Pay at £156.66, which lasts for 39 weeks).
Trade unions in the private sector have been struggling to recruit new members for some time. Overall union membership has risen for all but one of the last five years. In the private sector however a steady decline means it now stands at ten percent – its lowest level since 2011. The implications of this are clear. A report from The Resolution Foundation found that in 2021, only three percent of workers in the private sector had their wages set at the national or industry level. In the public sector, the figure was sixty-seven percent.
In this context GMB’s recognition agreement with Deliveroo, signed in May this year, differs massively from its recognition agreement with Uber. Instead of coming after a Supreme Court ruling that guarantees worker status for its riders, the deal was signed while the IWGB pursues a similar application on that very matter. Like the Uber deal, the announcement of the recognition was met with fury by the IWGB, denouncing it as “union-busting”, and a “cynical PR move”.
The first and immediate consequence of the Deliveroo-GMB recognition agreement is that the IWGB are locked out of the main element of their Supreme Court case – to gain statutory recognition from the Central Arbitration Committee (the governing body which oversees the regulation of labour law relating to collective bargaining and trade union recognition). Alan Bogg, Professor of Labour Law at Bristol University, explains:
If the Deliveroo-GMB deal is a voluntary recognition deal covering “workers”, the IWGB cannot then access the statutory recognition procedure where there is a voluntary agreement in place with another union. If the IWGB denies it is a relevant voluntary agreement because it doesn’t cover “workers” (following the description in the GMB collective agreement), then the IWGB can’t access statutory recognition anyway because it only covers “workers”. It’s a legal catch 22.
The IWGB said their legal team states this won’t affect their case. They’re right in that the merits of the rest of the case, such as worker status for Deliveroo riders, will be judged separately. However, the issue that ultimately meant riders were not granted worker status at the Court of Appeal and cases prior was that of “substitution”. Riders were told just weeks before the initial hearing in 2017 that their contracts had been amended to give them “The ability to appoint another person to work on your behalf with Deliveroo at any time”, as well as being told they could work for other firms while still working for Deliveroo. GMB say it was this issue which stopped them from pursuing Deliveroo in the courts, their National Officer Mick Rix explains:
Our lawyers looked at that four and a half years ago, these were the same lawyers that ran the Uber case for us – they told us then, “Do not touch this with a barge pole, you will lose.” The reason why, and we tested it, is we had members who had the unfettered right to substitute their work, where the laws let these workers down is it prevents these companies from providing benefits equal to “worker” status. The whole thing does need looking at, but if you compare it to Uber drivers have kept their self employment tax status, but they won benefits that self-employed are entitled to. And that’s what we would like to see rolled out to everybody else. We would like to see minimum guarantees for self-employed people. So if you ever have a pandemic again there are things in place for these people, and if they’re doing work for large companies and there’s a lot of work taking place, they can enjoy the benefits that that company can provide. That’s what we’re arguing for, that’s what our members are telling us “Get us these rights”, and that’s what we’re trying to do.
James Vail, Head of Communications for the IWGB shares the GMB’s view on the need for legislation, but questioned how the Deliveroo-GMB deal was struck:
We agree that there could be stronger legislation around the gig economy, but the legal infrastructure does exist. Companies exploit loopholes to deny workers the rights they deserve. Due to the lack of an employment enforcement body in the UK, it is left to unions like the IWGB to win worker status cases in the courts and then organise workplaces to ensure the ruling is implemented across the workforce. What is concerning about the Deliveroo-GMB deal is it appears that GMB have signed off on denying workers’ certain rights that are still being disputed in the courts. It is the reality of a working relationship that determines what rights workers should have, not backroom deals by people who either have no mandate or do not have the workers best interest at heart. On top of this, the deal does not cover things unaffected by legislation. Particularly, the deal does not address the fact that pay covers (rising) fuel and vehicle costs nor problems associated with over-hiring.
GMB shares the IWGB’s view on the lack of a government enforcement body being an issue, but Rix said “The only enforcer of rights for working people is an independent, affiliated trade union”. Neither GMB or the IWGB claim to have high membership density relative to the overall number of Deliveroo riders.
The GMB say that their deal means they’ll now negotiate on behalf of 90,000 riders and other organisations who represent less than 1 percent of that figure are therefore unrepresentative. The IWGB say the 90,000 figure is misleading due to inactive or infrequent Deliveroo accounts, and that non-union members always make up a big portion of their campaigns. The IWGB also added that none of their members have met a food delivery courier who is a member of GMB on the road. The GMB say they have been organising with Deliveroo riders for 4 years.
What matters in the here and now, however, is what each union can deliver for their members. On what day-to-day benefits Deliveroo riders will get as part of the GMB deal, Rix said:
They will get 24-hour, 7-day a week representation and cover. They will also get some self-employed benefits, access to services that we’ve got, access to education and training facilities. They will be able to articulate, take part in training schemes and the like. They will be able to feed into an organisation and a body of representatives and a network of representatives that will be able to raise issues on their behalf with the company at a very senior level. So actually, the riders’ views will end up on the boardroom table. They will end up being discussed by senior people within the union and the representative body, and the directors of the company. That is what we’re guaranteeing riders – that their views and their voices will be heard.
On the same question, Vail said:
The IWGB began organising with Deliveroo couriers in 2016, and has been a leading voice in exposing and campaigning against the company’s exploitation of couriers. In 2021, the IWGB organised international protests during the firm’s Initial Public Offering. Following public pressure from IWGB campaigns, deliveroo has been forced to introduce sickness insurance, parental pay, access to toilets for riders, reduced waiting times at restaurants, pay boosts and recruitment freezes… Due to the basic employment rights Deliveroo denies its workforce, we are unable to offer representation for workers for some workplace issues e.g. in a disciplinary. This is also because workers at Deliveroo are denied the right to a fair appeals process and regularly unfairly lose their jobs at the click of the button. This has not prevented us supporting workers in these situations and managing to get workers’ accounts back. Despite the successes we have in this area, the IWGB has always had a focus on workplace organising and building power and that is where a lot of our resources are spent. We help workers get organised locally and to understand their collective power. Using various organising techniques we build union density of militant workers who are ready to fight for change. On a more localised level we have seen victories over issues such as waiting times, toilet access, parking issues and better treatment. We have recently organised Dalston delivery drivers around poor treatment at Wingstop, and have won better conditions including facilities usage and a waiting area for them at that restaurant. On a larger scale pressure from the IWGB has led to workers being able to reject jobs and have access to sick pay and parental leave amongst other things. We also run anti-raids training for migrant delivery drivers, as well as events such as our bike tune up sessions.
GMB’s gig economy strategy banks on the bubble not bursting before they have built membership density via recognition agreements with companies who have either only just begun turning profits, or are still relying on investors to cover their losses. The very nature of the GMB’s recognition agreements involves staking their reputation on the idea that companies like Deliveroo and Uber are no longer the uncaring exploiters they once were. With the Deliveroo deal the fact that GMB secured collective bargaining on pay as part of the deal (rather than just the “consultation” on pay secured in their deal with Uber) is something GMB will point to along with the recognition agreement itself as proof positive of the change in attitude in companies like Deliveroo. Rix was keen to stress that Deliveroo made no issue of collective bargaining on pay and agreed to it from day one of negotiations with GMB.
James Farrar, General Secretary of the App Drivers and Couriers Union, has fundamental disagreements with both the GMB’s and IWGB’s respective strategies:
The asymmetry of power between workers and global platforms is obvious and the recent Uber files disclosures laid bare just how ruthlessly platform employers are prepared to behave to achieve rapid scale early on. They bet that rapid growth to scale puts them beyond reach of regulatory supervision and the collective organising power of workers. Now at scale, the platforms have endless flexibility to change their business model to further frustrate these same balancing & corrective forces and maintain the asymmetry. When it comes to Deliveroo, unions cannot afford to play the long game as the GMB appear to be doing or lose short term focus in the way IWGB appears to have done. The organising strategy needs to be strategic and intense to build long term power and take short term leverage. Unions need to be as agile in their organising as these platforms have been in their development.
The GMB’s Rix says recognition agreements like theirs are essential for trade unions to remain relevant in a rapidly changing gig economy:
The fact of the matter is, we’ve now secured three collective bargaining agreements, with three companies [Uber, Hermes, and Deliveroo] in their field that covers 200,000 people. We’re also in discussions with two or three other companies as well… If you look just over three years ago, a million and a half people were involved in the gig economy, now it’s over five million. This is not slowing down, it’s growing. The issue is the vast majority of people are paid by piece, they’re paid by task. Now we can’t stop that, but what we can do is make it fairer – and we can make it far more secure… These jobs will change in years to come, as competition takes place. Uber 10 years ago were viewed as the new kids on the block, now there’s loads of companies that are using their technology. Whether we like it or not, this will bring a situation around where companies are going to be vying for workers. And that is how supply and demand pushes up earnings.
The IWGB’s Vail disagrees and says gig economy companies like Uber and Deliveroo are denying their workers a voice:
Recognition agreements are meaningless unless they are backed up with an organised workforce who are willing to take action if conditions do not improve and evidence of this can be seen in this deal and the other deals GMB have made. It seems that companies like Uber and Deliveroo will do everything they can to deny their workers a voice and that is why it is so important that the IWGB continues to speak a language they are forced to listen to – direct action!
Paul Nowak, who was recently announced as the next General Secretary of the Trades Union Congress and is currently Deputy General Secretary, outlined the importance of recognition agreements and stressed the need for unions to be flexible in their organising strategies:
It’s about picking the right organising tool for each employer that you’re dealing with. In some cases it’s going to be a very straightforward organising campaign. Actually, I think from a union perspective, no one’s written a rulebook on organising in the platform economy. You’ve got to be flexible, you’ve got to adapt, and you’ve got to think about what’s going to work for the people you’re trying to represent. And what’s going to work for the employer, because at the end of the day you’ve got to sit down and negotiate things like pay with the employer. There’s always two parties to any agreement. I’m convinced Deliveroo will not be getting an easy ride from the GMB in any sense. Frankly, I want to see more agreements, more of our unions signing agreements across the platform economy. When I started in the trade union movement there was no such thing as a platform employer, people who delivered parcels were directly employed by the company that employed them. They were given a uniform and a van, they had all the benefits of working directly for their employer. Unfortunately we’ve seen this outbreak of kind of wild west style employment arrangements, not just in parcel delivery but across logistics and other parts of the economy. Unions have to respond to that change in the world of work and find a way of representing people effectively. I think the Deliveroo deal gives GMB the opportunity to get its foot in the door to represent people and get them into the union and that’s got to be a good thing from my perspective.
Despite the philosophical differences between established TUC unions and newer non-TUC unions, their approaches aren’t necessarily in opposition. The dire state of private sector union membership proves this, with the gig economy being the harshest terrain for trade unions. Bucking this trend against companies who freely ignore court rulings that go against them seems like an impossible task. And while the IWGB may feel aggrieved at the GMB striking the agreement with Deliveroo – these kinds of disputes aren’t unheard of even between TUC affiliated unions.
The Deliveroo-GMB deal starts in September. How quickly GMB builds up membership density amongst riders and secures pay increases via collective bargaining will ultimately be what this agreement is judged by. If GMB’s long march fails to pick up steam, riders will be depending on the IWGB prevailing in the Supreme Court in winning worker status – and the benefits that come with it.
But such a victory, or any GMB-led attempted pay bargaining or conditions consultation would be weighed against Deliveroo’s financially weak position. Such weakness will likely serve to further its resolve to resist changes to its business model. This was demonstrated recently in France (where riders are considered workers and as such are entitled to basic employment rights) where Deliveroo were fined €375,000 after a court found it guilty of improperly treating its delivery workers as independent contractors. Despite their recognition agreements with GMB, both Uber and Deliveroo are giving with one hand and taking with the other, it’s just Deliveroo’s more precarious financial position means they’re inclined to give less and take more.
Read part one of Ciaran McGurdy’s report into the GMB’s gig economy strategy here.