Deliveroo faces lawsuit for allegedly underpaying food delivery riders

The food delivery rider allegedly only earned a bit more than half of the Australian minimum wage.

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Image: Deliveroo

A former Deliveroo rider has filed a lawsuit against the Amazon-backed food delivery company for allegedly failing to pay the minimum wage to its riders.

The rider, Jeremy Rhind, raised the lawsuit after calculating that he only earned around AU$10.50 an hour -- around half of the Australian minimum wage of AU$19.49.

"If I end up losing the case it will be really bad, it will incentivise all sorts of companies and corporations to use these sorts of tactics to manipulate and take advantage of their workers and pay less than minimum wage," Rhind said.

"If I lose this case, then minimum wage will not be real thing in Australia and that would be a real shame."

The case will hinge on how much control Deliveroo has over its food delivery workers and whether they are classified as employees or independent contractors.

Rhind's case has been backed by the Transport Workers' Union (TWU), who previously supported a similar lawsuit against food delivery company Foodora.

In the Foodora lawsuit, the Fair Work Commission came to the decision that Foodora's food delivery riders were employees as they never operated a separate delivery business and "could only be said to be performing work for Foodora".

Foodora eventually came to a legal settlement, agreeing to compensate nearly AU$3 million to around 1,700 delivery riders for underpaying wages and failing to pay superannuation.

See also: Australian Fair Work Ombudsman finds Uber drivers are not employees

In support of the new lawsuit against Deliveroo, the TWU has also called on the federal government to create legislation to protect gig economy workers from exploitation, stating that food delivery workers should be officially classified as employees rather than independent contractors.

"The federal government should've acted after the Foodora case, it should've stepped in and said this exploitation has to end, but it has sat on its hands. And its left us in a position where there is no alternative but to continue to fight this on a case-by-case basis," TWU national secretary Michael Kaine said at a press conference on Wednesday afternoon.

Under Australian law, people categorised as independent contractors -- like Deliveroo food delivery riders -- are not eligible for employee benefits like superannuation, sick benefits, or stock options.

In response to the lawsuit, Deliveroo told ZDNet that it enables its riders to "choose when, where, and whether to work", making them all independent contractors.

"On average Deliveroo riders in Australia work 15 hours a week, earning over AU$22 per hour on average, fitting riding around study, hobbies, caring responsibilities or other work. We will always defend riders' ability to choose to work this way," a Deliveroo spokersperson said. 

"If riders were employees, the flexibility they enjoy today would be removed and they would have to work exclusively for Deliveroo in fixed shift patterns, which is not the way of working riders tell us they want." 

On average Deliveroo riders in Australia work 15 hours a week, earning over $22.00 per hour on average, fitting riding around study, hobbies, caring responsibilities or other work. We will always defend riders' ability to choose to work this way.

If riders were employees the flexibility they enjoy today would be removed and they would have to work exclusively for Deliveroo in fixed shift patterns, which is not the way of working riders tell us they want."

The scrutiny against gig company companies in Australia has continued to pile on, as Uber is also in the midst of a class action from over 6,000 taxi drivers. The class action against Uber alleges that it operated illegally from April 1, 2014, to July 31, 2017, resulting in monetary losses for taxi drivers.

"Make no mistake, this will be a landmark case regarding the alleged illegal operations of Uber in Australia and the devastating impact that has had on the lives of hard-working and law-abiding citizens here," Maurice Blackburn head of class actions Andrew Watson said at the time.

Rhind and Deliveroo will appear in court next month.

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