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Shares of food-delivery service Deliveroo rose as much as 9% as a court ruled its riders are self-employed.
The U.K. Court of Appeal ruling in favor of Deliveroo
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was the fourth judgment that supported its view that its riders are self-employed. The ruling contrasts with the decision by the U.K. Supreme Court that Uber Technologies
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drivers are employees. The key distinction is that Deliveroo allows its riders to get substitute workers.
“The company’s success appeared to hinge on the fact riders are able to ask another person to take on a job for them. This was the crunch factor which led to the U.K. Supreme Court ruling that because of the lack of substitution rights, Uber drivers should be classed as workers,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
The Independent Workers’ Union of Great Britain, which brought the lawsuit against Deliveroo, said it was considering its legal position, but noted that the judgment points out that riders would benefit from collective organizing.
Deliveroo competes with Uber and Just Eat Takeaway
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in its home U.K. market.
Deliveroo’s stock is still down about 30% from the 390 pence initial public offering price in March.
