Just Eat is planning to make 1,700 couriers redundant in the UK as the takeaway delivery firm shifts back towards a gig-economy model and ditches guaranteed minimum pay, sick pay and holiday pay.
A further 170 head office staff will also lose their jobs as the firm attempts to cut costs in a highly competitive market.
It is understood most of the head office roles are in the UK, in London and the cities where Scoober operated.
The company took 10% fewer orders last year in the UK and Ireland while losses for the group ballooned to €5.7bn (£5bn) from €1bn a year before after a series of strategic missteps including the acquisition of US delivery firm Grubhub and Brazil’s iFood.
The courier redundancies mark a U-turn from Just Eat’s previous aim to end gig-working across Europe by offering worker status, which guarantees better employment rights than the self-employed contractor model widely used by rivals including Deliveroo.
Alex Marshall, the president of the Independent Workers Union of Great Britain (IWGB), said: “When Just Eat said it was going to [introduce worker contracts] it did seem a step in the right direction. It’s frustrating … it turns out it was nothing more than a PR stunt and they are no better than the others who chew up and spit out workers.”
Andy Prendergast, the national secretary of the GMB union, said: “Just Eat’s decision to lay off 1,700 workers is a betrayal of those who have worked so hard for the company. At the exact moment when rivals like Deliveroo are offering improved benefits and sick pay, this is a backward step that underlines the need for minimum standards for delivery workers.”
Just Eat began offering worker contracts in 2020 and signed up more than 3,000 of its couriers in London, Birmingham, Liverpool, Nottingham, Cambridge and Brighton. Those numbers have since fallen to 1,700 as riders have moved on. Just Eat has offered fewer couriers its new deal and riders have been given six weeks notice with pay.
Within Scoober the riders were entitled to more than the legal minimum in hourly pay, pension contributions and benefits including holiday pay and sick pay.
The couriers also work set shifts, are provided with e-bikes or e-mopeds, which are maintained by the company, and have the option to operate from a central hub, where they can pick up equipment and take breaks. They stopped working for several other apps at the same time as delivering for Just Eat.
A spokesperson for Just Eat said: “Just Eat UK is reorganising and simplifying its delivery operation as part of the ongoing goal of improving efficiency. As part of this process we have proposed to transition away from the worker model for couriers, which is a small part of our overall delivery operations – running in certain parts of six UK cities. There will be no impact to the service provided to partners and customers.
“Our top priority now is to support impacted employees and couriers. We are hugely grateful to our talented colleagues and couriers who have been part of the worker model in the UK.”
The company is understood to expect to continue to use the Scoober model in continental Europe with more openings planned this year. The UK Scoober riders will be able to apply for self-employed contractor roles for Just Eat if they wish.
The move is a disappointing setback for workers’ rights campaigners who hoped that gig economy companies would consider change after Uber was forced to pay its UK private hire drivers minimum wage and holiday pay when the UK supreme court backed a 2016 employment tribunal ruling that its drivers should be classed as workers.
The takeaway courier business Deliveroo’s stock market debut was also hit by concerns about the employment status of its workers after it emerged that the company had set aside £112m to cover potential legal costs relating to efforts to improve their rights.