Just Eat turns away from gig economy by recruiting 1,000 riders

FTSE 100 food delivery company Just Eat Takeaway is to offer its delivery riders full-time, hourly pay contracts in a break from the “gig economy” freelancers used by rivals.

The Anglo-Dutch takeaway company is planning to create 1,000 delivery rider jobs in London by March, who will be provided with branded e-bikes, and offered living wage contracts, holiday pay and pension contributions.

Riders will be on a mix of full, part time and zero hours contracts. It will work on an agency model with riders contracted to Dutch outsourcer Randstad.

The move to an agency model from Just Eat comes after years of debate and legal cases over the nature of “gig” contracts.

Riders with Deliveroo, the food delivery app, were ruled to be freelancers in a 2017 arbitration case. Meanwhile, Uber is currently awaiting a Supreme Court judgment that will decide whether its drivers were self-employed.

At many other food delivery companies, riders are simply paid per meal they deliver, which can mean pay fluctuates depending on demand.  Most of Just Eat’s restaurants in the UK supply their own delivery staff, who may be freelance or employed by their restaurant, with Just Eat providing their online ordering service.

However, it is increasingly also providing delivery logistics for restaurants that do not provide their own takeaway drivers.

In January, Just Eat was taken over by Dutch firm Takeaway.com in a £6bn deal. Takeaway.com had already moved away from using gig riders and chief executive Jitse Groen said over the summer he planned to move all the company’s operations away from freelance riders.

Markets Hub — Just Eat PLC

Andrew Kenny, Just Eat’s UK managing director, said in parts of Europe the “winds of change” were to move away from a freelance-led model.

He said: “In the UK, the incumbent model is primarily a contractor model. For us this makes couriers an integral part of our offering. It is a big step forward.”

He added that making more couriers full or part time workers would add to costs. Mr Kenny said: “There is an inherent cost to operating a model like this.”

Just Eat has seen revenues grow during the pandemic, with sales up around 44pc over the start of the year. People stuck at home have taken to ordering more takeaways. Just Eat has also taken to signing up more major brands to its delivery network, adding McDonald’s to its app earlier this year.