Deliveroo got a much-needed boost after a UK appeals court ruled its riders are self-employed, bolstering the viability of its labour model after rival Uber Technologies lost a similar case earlier this year.
Deliveroo’s shares in London jumped by more than 9% after the ruling. The company’s reliance on gig workers drew criticism from investors and riders in the run-up to its disappointing March initial public offering.
The company said the unanimous court decision, dismissing an appeal from the IWGB trade union, affirmed its aim to offer couriers full flexibility.
“UK courts have now tested and upheld the self-employed status of Deliveroo riders four times,” the company said.
The decision comes months after the UK’s Supreme Court ruled that Uber’s drivers must be treated as “workers,” a legal status that gives people rights such as a guaranteed minimum wage and paid vacation time.
That ruling was largely based on the control Uber exerted over its drivers, including their ability to log them out of the app.
The appeals court considered the Uber ruling but decided that it wasn’t relevant to this case. The Deliveroo suit is concerned with riders’ ability to unionise, while Uber’s case was focused on the worker rights drivers were entitled to under UK employment law.
Judge Peter Coulson said the ruling may seem counterintuitive because “it may be thought that those in the gig economy have a particular need of the right to organise as a trade union.
“I quite accept that there may be other cases where, on different facts and with a broader range of available arguments, a different result may eventuate,” he said, leaving the door open to other potential claims involving gig economy workers.
“The Court of Appeal has emphatically upheld the findings of the High Court, even after considering the effect of the recent Supreme Court decision” in Uber that found that Uber drivers were workers, Colin Leckey, a lawyer at Lewis Silkin, who represented Deliveroo in the case, said.
Still, the problem of how gig workers can collectively bargain isn’t going away, according to Joe Aiston, an employment lawyer at Taylor Wessing, who wasn’t involved in the case.