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Deliveroo shares climb as riders classed self-employed by UK court

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Deliveroo PLC (LON:ROO) investors enjoyed a rare piece of good news today as the Court of Appeal threw out an attempt to have its delivery riders classified as workers.

The IWGB union lost an appeal against past judgements that classed the delivery app’s couriers as self-employed.

Deliveroo added that it is the fourth court judgement in the UK that has determined its riders work for themselves.

The case dated back to 2017 when IWGB argued that workers had the right to unionise under European Law. 

 As part of this latest ruling, the court found that Deliveroo riders enjoyed a “virtually unlimited” right to substitution with other riders, which Lord Justice Underhill said was a key determinant in his judgment.

Deliveroo riders could therefore offer any work to other riders without penalty, he said, which meant there was no relationship with the company.

This also made it different from ride-hailing app Uber that earlier this year had lost a case about whether its drivers were self-employed.

The IWGB Union cannot appeal the decision again to the Supreme Court, Lord Underhill also ruled.

Concern over the status of its workforce was one of the reasons behind the company’s disastrous flotation in April.

If the riders are classified as workers and not self-employed, they will be eligible for standard workplace benefits such as paid holidays, sick leave and a pension, the costs of which might completely upend Deliveroo’s business model argued its critics.

The company has always maintained that its riders choose to be self-employed because of the freedom that status gives them to do other jobs, for instance.

As well as the UK, Deliveroo is facing legal action in places such as Spain and Italy but the UK is one of its main markets and this was seen as a critical win for the business.

In a statement, it said: “Deliveroo’s model offers the genuine flexibility that is only compatible with self-employment, providing riders with the work they tell us they value. “

Priced at 390p in the IPO, the shares rose 8.7% today to 273.5p.

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