Millions of gig economy workers have had their hopes of better pay boosted after food delivery giant Just Eat offered delivery staff hourly wages.
The British company said its riders will be employed full-time, part-time or on zero hours contracts, instead of being paid for each job they complete.
They will be entitled to the minimum wage, as well as holiday, sick pay, pension contributions and other benefits such as maternity or paternity leave.
Delivering wages: Just Eat said its riders will be employed full-time, part-time or on zero hours contracts, instead of being paid for each job they complete
It up-ends the approach taken across most of the gig economy and piles pressure on rivals such as Deliveroo and Uber Eats to follow suit.
The legal status of workers has been controversial, with unions claiming many face low pay, poor conditions and no job security, and the matter is being considered by the Supreme Court.
Andrew Kenny, Just Eat’s UK boss, said: ‘We believe it is our responsibility to offer couriers a wide range of working options and benefits.
‘From our experience in other European markets, we know many couriers value the benefits and protections our new model offers and, with the use of electric vehicles, this will also help us build a sustainable future for food delivery in the UK.’
Salary pledge: Just Eat chief exec Jitse Groen
The change follows Just Eat’s merger with Dutch rival Takeaway in the spring.
Takeaway already pays drivers by the hour. Jitse Groen, the Dutch firm’s billionaire founder and now chief executive of the combined group, previously told the BBC: ‘We’re a large multinational with quite a lot of money and we want to insure our people. We want to be certain they have benefits, that we do pay taxes on workers.’
Yesterday, Just Eat said it would hire 1,000 UK drivers on the new pay arrangements, starting in London and then expanding to other cities.
Recruits will deliver on behalf of big branded partners, such as McDonalds and Greggs, as well as restaurants without their own riders
Tens of thousands of drivers who are employed by restaurants that use Just Eat’s platform, but not Just Eat itself, will not benefit.
Still, the move is expected to strengthen calls for Deliveroo and Uber Eats, which directly use thousands of riders themselves, to follow their rival’s example. An estimated 3m people work in the gig economy, with more than half aged 18 to 34.
The Independent Workers Union of Great Britain (IWGB), which represents food couriers, has claimed staff often work punishing schedules but can be fired at short notice for relatively minor infractions.
Deliveroo pushed back against suggestions it could offer new terms to its 50,000 riders and insisted many ‘value the freedom’ of self-employed status.
Boss William Shu, who started the business doing deliveries himself, told CNBC this week that the average rider worked 10-14 hours per week.
A report for the Government by Matthew Taylor three years ago concluded that many workers valued the flexibility of gig economy jobs, but called for better security and a minimum wage.
Deliveroo said: ‘Over 80 per cent of riders say that the freedom to choose when and where to work is their primary reason for riding with Deliveroo. An employment model would deny riders the ability to control their own work patterns.’ Uber did not respond to a request for comment.
Greg Howard, chairman of the IWGB’s courier branch, said: ‘This decision proves that flexibility does not have to be a trade-off with basic workers’ rights. The pandemic has shown that, far from being flexible, people have had to work unsociable hours to even earn a liveable income.’