Concerns over “delegating”, pay and conditions for riders

Concerns about the practice of delivery app riders “delegating” jobs through platform Deliveroo to other riders have surfaced, amid mounting criticism about pay and safety standards.

Deliveroo's Australia CEO, Ed McManus, and head of operations, Julia Duck, testified before a NSW parliamentary committee on Tuesday. Picture: NSW parliament via NCA NewsWire.

Concerns about the practice of delivery app riders “delegating” jobs through platform Deliveroo to other riders have surfaced, amid mounting criticism about pay and safety standards in the industry.

Deliveroo head of operations, strategy and performance Julia Duck who fronted a NSW parliamentary inquiry on Tuesday alongside chief executive Ed McManus, defended the company’s hands off position when it came to pay and conditions for the “delegates”, even though they are insured by the platform.

In response to questioning as to whether these workers – who carry out deliveries on behalf of riders and pay a percentage of the earnings to them – were being exploited by the practice, Ms Duck said Deliveroo was not responsible for the delegates’s conditions.

“We don’t monitor anything to do with the delegates because that is the riders right as an independent contractor, so they don’t have to notify us of the delegation,” she told the inquiry investigating the impact of technology on the future of work.

“In terms of any other way of engagement you would have to discuss that with riders as that’s their agreement with that person.”

Delegation is a “novel” dimension to Deliveroo‘s business model, that is also practised by industry leader UberEats.

Mr McManus also defended the company’s track record of employing riders as contractors who aren’t entitled to sick pay, workers compensation or any other form of leave. He said the company had seen eight workers compensation claims rejected and decided to switch to it’s own independent insurance.

“Up until October 2019 we included riders earnings for the purpose of calculations of the various workers compensations schemes,” Mr McManus said.

“And we were seeing an increasing number of rejected claims so for that reason we moved away to a third party insurance policy.”

Deliveroo refused to answer questions on the average hourly rate of pay for riders and delegates, claiming it was an issue of commercial in confidence.

The food delivery sector has come under increased scrutiny after five delivery riders died in just two months last year.

It has also faced extensive criticism for low remuneration with riders at Deliveroo earning on average $10 to $11 per “drop”, Ms Duck told the inquiry.

Deliveroo also could not clarify how many of its workers had been injured at work.

NSW Greens MP David Shoebridge said the standard of pay and worker conditions for Deliveroo riders was concerning.

“This arrangement has riders earning one fee and basically apart from that they’re on their own,” Mr Shoebridge said on Tuesday.

“You provide a set basic fee, you have some insurance coverage if there is an injury, but apart from that workers are on their own if they want to take a holiday or get sick or want to take any long service leave.”

Mr McManus defended the conditions offered by the platform, saying they were driven by the marketplace and riders would go elsewhere if they were below standard.

“We have a commercial imperative to set fees that are attractive for riders otherwise riders won’t do any orders for us and only for our competitors,” he said.