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Top UK investors refuse to invest in Deliveroo over workers’ rights

Top UK investors refuse to invest in Deliveroo over workers’ rights
Top UK investors refuse to invest in Deliveroo over workers’ rights

Two of the biggest investors in the UK have reportedly announced that they would not be purchasing shares of Deliveroo, following its listing on the London Stock Exchange, amid growing concerns over workers’ rights.

Deliveroo hopes to be valued at more than £8.8 billion when it goes public in April. However, both Aviva Investors and Aberdeen Standard, which jointly manage over £800 billion between them, stated that they were discouraged by the poor working conditions of the Deliveroo riders .

The online food delivery company, on its part, responded to the news by stating that delivery riders have the freedom to select their own working hours. Deliveroo riders are considered self-employed, which means that they are not entitled to a minimum wage, as well as sick and holiday pay from the company.

Head of Aberdeen Standard’s UK Equities, Andrew Millington, stated that the company’s working conditions were a warning and that Aberdeen would not be comfortable with the way Deliveroo riders are employed.

Big institutional investors such as Aberdeen Standard usually manage money, which includes pension funds. When they invest in a firm, they can effectively influence the way it is supposed to run, like through relationships with managers as well as shareholder votes or through their sheer financial muscle.

Millington further added that it will be quite interesting to see whether the online food delivery firm would be able to attract long term investors without making any progress on basic worker rights.

David Cumming, CIO, Aviva, stated that Deliveroo workers are presently grouped as riders, meaning they do not get any basic rights for minimum wage, holidays, or sick pay. However, investors have recently started to take their social responsibilities more seriously.

Cumming further added that employers can make a significant difference in workers' lives through guaranteed living wage or working hours, and the way enterprises behave is becoming much more important.

Recently, ride-hailing firm Uber was ordered to regroup its drivers as workers after a landmark UK supreme court case in February.

The online food company has also set aside approximately £112 million to cover potential legal costs concerning the employment status of its riders.

A spokesman from Deliveroo stated that the firm is pleased to provide employment to over 50,000 delivery riders across the UK and that more people are applying to work with Deliveroo every week.

Source credit: https://www.bbc.co.uk/news/business-56515498

 

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Nandita Bhardwaj

Nandita holds a management degree with specialization in marketing, and boasts of a short-term experience in the field of recruitment. Following her passion for writing however, she decided to pursue a career in the field of content development. Presently, Nandita pens down news pieces for newsorigins.com, spanning the verticals of business, finance, and technology.