Restaurant delivery firm warns MPs over extra costs as Uber executive tells them his firm has shown ‘wrong attitude’ in past

This article is more than 2 years old

This article is more than 2 years old

The boss of Deliveroo has warned MPs that if the company is forced to give workers basic rights such as the minimum wage and holiday and sick pay it will pass the cost on to consumers by raising the cost of delivery by £1.



Dan Warne, Deliveroo’s managing director of the UK and Ireland, told parliament’s business committee that the cost of providing rights to workers would be borne by customers ordering takeaways.

Uber, which was last month stripped off its London licence to operate, said employing its 50,000 self-employed drivers would cost the company millions of pounds a year.

Andrew Byrne, Uber’s head of policy, said: “I don’t have the precise figures … but I’m certain it would be the tens of millions, certainly.”

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Uber is awaiting a court ruling on whether its drivers should be granted workers’ rights. Two drivers won a landmark ruling last year that found Uber drivers should be treated as employees and entitled to the minimum wage and holiday pay.

Uber is appealing against the ruling. The decision, expected before Christmas, could have wide-ranging implications for companies in the “gig economy”.

A government review of new working practices by former Tony Blair aide Matthew Taylor said all jobs should be “fair and decent” and recommended that workers at gig economy employers should be classified as dependent contractors rather than self-employed.

Byrne admitted to MPs that the company had shown “the wrong attitude” on a number of issues, but could now see a path forward with Transport for London to address the regulator’s concerns.

TfL refused to renew Uber’s licence on the grounds of “public safety and security implications” relating to issues such as the reporting of serious criminal offences.

Labour MP Peter Kyle asked why Uber had been so “aggressive” in its response to Transport for London.

“Your initial reaction was that TfL is putting 40,000 people out of business,” he said. “You are going to court denying responsibility for those people in the first place.”

Byrne said: “The company accepts that in lots of places it has had the wrong attitude and needs to change.”

Byrne said a modification to the app would automatically log off drivers who had been online for 10-12 hours and would ensure that drivers take sufficient breaks.

He said Uber was also providing more training and was helping drivers to save for ISAs and pensions.

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Parcel delivery firm Hermes, which was found in a Guardian investigation to be paying some of its couriers below the “national living wage”, said it would cost £58.8m annually to employ its 15,000 staff, including £32m in national insurance contributions.



Hugo Martin, the Hermes director of legal affairs, apologised to MPs over the treatment of some drivers in the past, including the cancellation of a driver’s contract because he was unable to work due to the premature birth of a child.

Labour MP Anna Turley said a Hermes worker had told the committee that a worker who was rushed to hospital because of a premature birth had their contract cancelled.

“The boss essentially said ‘That’s it, your contract is cancelled. We’re not using you any more,’” she said. “The words were ‘parcels come first.’”

Martin said he was “shocked” by the revelations, adding that such incidents were “unacceptable” and managers would be disciplined.



He said Hermes now has a network of back-up drivers to provide cover in emergencies if couriers were unable to find someone else to do their round.



Kyle said evidence from employees suggested that for Hermes couriers, “life has to fit around the work”.

“There is a chasm between what you are saying and the life you are describing of the couriers and the one we are hearing about,” he added.