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Investors scared off by poor HR as floatation fails to deliver
16 Apr 2021

Deliveroo’s less than impressive floatation on the stock market recently raised a number of questions. Partner Julia Fitzsimmons looks at whether the company’s employment record could point to investors’ failure to saddle up.

At the risk of sounding like a broken record, or perhaps broken bike wheel, good human resources makes business sense. And you have to wonder if concerns over Deliveroo’s workers’ rights effectively scuppered its predicted £8.8 billion valuation.

Yes, lots of analysts pointed to stock market volatility for the eventual valuation dropping by more than £1 billion, but I’m willing to bet my take-away that poor HR practices directly contributed.

Aviva Investors, which manages £365bn of assets, had already warned it would not invest in the delivery company as Deliveroo’s riders did not get the minimum wage, sick leave and holiday pay.

Sure enough, other investors felt the same. That’s because how a company behaves and engages with its employees matters. People matter. Deliveroo has often pointed out, including in court, that it had self-employed ‘riders’, not employees, and they had "freedom" to choose their hours.

But in 2021, when we’ve all experienced a year where social responsibility has come to the fore, that’s just not enough anymore. If you’re in business to make a profit, that can’t come at the expense of the people delivering your service or product. 

David Cumming, chief investment officer at Aviva, told the BBC's Today Programme ahead of the floatation that investors were taking social responsibilities "a lot more seriously".

Uber, another gig economy company, has learned the hard way and recently lost a five-year legal battle with drivers who claimed it had wrongly classified their employment status. Uber has offered holiday pay, a guaranteed minimum wage, and pensions benefits to its drivers.

Will Shu, CEO at Deliveroo, has promised bonuses to riders following the floatation, depending on the number of orders they’d dropped off on the doorstep. I’m not sure that will go far enough.

Businesses which have sound HR and corporate social responsibility strategies are more profitable. It’s as simple as that.


For help and advice on these issues Julia Fitzsimmons will be able to help.

Meet Julia Fitzsimmons