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Deliveroo has denied any wrongdoing and strongly rebuffs the accusation that it treats its workers shabbily.
With its initial public offering (IPO) a matter of days away, leading food delivery company Deliveroo has announced that it would be cutting the share price. This decision was made because of the backlash the company had gotten for the poor treatment of its riders and the ownership structure of the Amazon-backed company.
The delivery company had stated that its shares were going to be in the range of £3.90 to £4.60 each, however, that has now been slashed to around £3.90 to £4.10 for each share. This means that the market capitalization of the firm would drop from the earlier postulated range of £7.6 billion and £8.8 billion to £7.6 billion and £7.8 billion instead.
Large scaled investors had planned to boycott the shares of the company citing those earlier reasons. According to Legal and General Investment Management, which is the biggest fund manager in the UK, the firm’s ownership structure leaves a lot to be desired and coupled with the fact that the firm deals in the gig sector, it most likely wouldn’t be investing in the shares.
These concerns were also shared by other investors like Aberdeen Standard and Aviva Investors, who expressed their displeasure about the firm’s treatment of its workers.
Deliveroo Makes Its Share Price Lower but Denies Any Wrongdoing
Deliveroo has denied any wrongdoing and strongly rebuffs the accusation that it treats its workers shabbily. According to the firm, its platform gives its riders an opportunity to work at will, like its competitors, and its riders are able to earn an average of £13 per hour during its busiest times. Also, the firm has promised to pay its loyal drivers a bonus between £200 and £10,000 in the IPO. The average bonus would be £440.
A spokesperson of the firm also went on to add that the slash of its share price was not induced by the actions of the investors, rather it was influenced by market conditions. The spokesperson went on to add that “Deliveroo is choosing to price responsibly within the initial range and at an entry point that maximizes long-term value for our new institutional and retail investors.”
However, claims that the company pays its workers an average of £13 per hour has been fingered to be false by the Independent Worker’s Union for Great Britain who alleges that some riders of the company earn as low as £2 per hour. As of Sunday, some of these riders of the firm still held a strike.
The firm’s CEO is in line to earn around $530 million from the IPO and according to the ownership structure, he would have a 50% voting right.