Big battalion investors snub Deliveroo amid fears over workers’ pay

A host of Britain’s biggest fund managers have snubbed Deliveroo’s stock market float amid growing concern over the treatment of its workers.

Aberdeen Standard, Legal & General and M&G joined Aviva in shunning what looks like being the biggest London listing in a decade.

In a further setback, CCLA, which manages funds for the Church of England, charities and councils, said it would not take part, as did BMO Global, the asset management arm of the Bank of Montreal in Canada.

Underpaid? Investors are concerned about tens of thousands of Deliveroo’s delivery riders, some of whom are thought to make less than £2 per hour

The funds collectively manage trillions of pounds of savers’ money so their decision is a blow to Deliveroo, which is seeking a valuation of up to £8.8billion.

There are concerns about tens of thousands of the firm’s riders, some of whom are thought to make less than £2 per hour.

Deliveroo’s 50,000 UK riders are classed as ‘self-employed’, meaning they are not entitled to the minimum wage, holiday pay or sick leave.

However, that arrangement has come under scrutiny after a Supreme Court ruling forced Uber to change course and offer taxi drivers those benefits.

Deliveroo insists that this ruling does not apply to its riders, who value the ‘freedom to choose when and where they work’.

But yesterday major funds lined up in opposition to the practice, saying it was a ‘red flag’.

Rupert Krefting, head of corporate finance and stewardship at M&G, said: ‘We do not intend to participate in the Deliveroo IPO [initial public offering].

‘Whilst we acknowledge the disruptive impact that Deliveroo has had on the food services market, we still see risks to the sustainability of its business model for long term investors. 

‘This is largely driven by the company’s reliance on gig-economy workers in the UK as informal employment contracts potentially fall short in offering the value, job security and benefits of full employment.’

Andrew Millington, head of UK equities at Aberdeen Standard, said: ‘There are actually a number of red flags around Deliveroo and the sustainability of its business model, but employee rights is the key one.

‘As a long-term owner of Deliveroo, we wouldn’t be comfortable that the business model is sustainable and that the way in which its workforce is employed is sustainable for the long term.

‘The judgement that we have to make is whether we as shareholders can effect positive change. Where we find it much more difficult, unfortunately, we sometimes have to take the view that disinvesting – or not investing in the first place – is our only option.’

L&G ruled itself out of investing as well, pointing to Deliveroo’s proposed dual-class share structure – which will give founder Will Shu greater voting powers – as a concern, as well as the ‘rights of employees’.

BMO Global and CCLA have also shunned the listing, according to the BBC.

The flurry of opposition came a day after Aviva revealed that it would not invest in Deliveroo because of ‘investment risk and social issues’.

Thousands of invoices from 300 riders showed that one-in-three riders earned less than the National Living Wage of £8.72 an hour, according to the Bureau of Investigative Journalism. Some reportedly made less than £2 per hour.

Deliveroo’s listing next month is expected to be the biggest since mining giant’s Glencore’s debut in 2011.

It is targeting a valuation of between £7.6billion and £8.8billion. Boss Shu, 41, is expected to make almost £600million from the deal.

But Neil Wilson, chief market analyst at, said the company was now facing ‘a bumpier road’ after public criticism from big City institutions.

Deliveroo said: ‘Deliveroo riders are self-employed because this gives them the freedom to choose when and where to work.

‘We are confident in our business model, which has been upheld by UK courts three times, including the High Court twice.’

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