31 March 2017

Deliveroo Managing Director Dan Warne has told a Commons Select Committee that his company cannot pay the minimum wage within its business model and that is why it is resistant to its riders enforcing their rights at tribunal.

The extraordinary claim came as part of the Scottish Affairs Committee's inquiry into the "gig economy", according to the Morning Star.

At the Department for Business, Energy and Industrial Strategy Committee's hearing into the same subject, Warne promised that the company would look into scrapping a clause in riders' contracts that states they may not query their employment status at tribunal.

Warne told the Committee that Deliveroo was resistant to employment tribunal cases not because it was opposed to employment rights, but because there is a "resistance to having to pay guaranteed minimum wage for every hour for every rider".

Directly employing delivery workers would mean paying 30% extra in payroll costs in National Insurance Contributions, he added.

He also said the company does not offer any career progression to its rider because that would be "getting close to looking like employment" and could land his company in trouble, according to the Morning Star.

Deliveroo is currently being taken to task by Leigh Day, a legal firm helping around 200 "riders" to contest their "self employed" status at tribunal.