Gig economy reforms leave future of restaurant delivery costs uncertain

By Sophie Witts contact

- Last updated on GMT

Gig economy reforms leave future of restaurant delivery costs uncertain

Related tags: Employment

Tight restaurant delivery margins could be about to come under further pressure following government plans to bring in new reforms for gig economy workers.

The changes include enforcing sick and holiday pay and tougher fines for companies that use part time and flexible workers, the so-called gig economy.

The government is also asking the Low Pay Commission to consider the impact of introducing higher minimum wage rates for those on zero-hour contracts.

Flexible workers will also be able to request to move to a more stable contract.

The proposals, which are in response to last year’s Taylor Review in to employment practices, could place further pressure on the already tight margins that operators face when working with restaurant delivery firms such as Deliveroo and UberEats.

Deliveroo’s UK and Ireland boss Dan Warne told MPs in October that employing riders full-time, as opposed to self-employed contractors, could add £1 to the cost of each delivery.

He added that the self-employment model was ‘very, very’ popular with its 15,000 riders, many of whom fit their shifts around other work or studies.

However a survey by workplace campaigning site Organise found that nearly four in five customers would be willing to pay more​ to give food couriers basic benefits.

Online delivery firms have faced criticism in the past for failing to offer their workers minimum wage, and holiday and sick pay.

Deliveroo sought to appease its critics in December by offering its drivers a £1.85 a week income insurance package. Riders are entitled to claim 75% of their average weekly income for up to six months if they are unable to work due to injury or illness.

Commenting on the new proposals business secretary Greg Clark said: “We want to embrace new ways of working, and to do so we will be one of the first countries to prepare our employment rules to reflect the new challenges.”

Related topics: Legislation

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