When Jake Thomas applied to be a courier for Just Eat, he was excited to become an employee. The 22-year-old union member saw the meal delivery app advertising positions in London with hourly wages, paid holidays, and sick pay, and he was instantly drawn.
But when Thomas looked at the paperwork for his new job, the company on the contract was not Just Eat, but a Dutch staffing agency called Randstad. In 2020, Just Eat had announced it would be leaving the gig economy model behind by giving its couriers hourly pay and benefits under what is called its “Scoober” model. But the small print showed that riders would not receive these benefits from the platform directly. Now Thomas says he is stuck between the two companies when he needs to complain about problems at work, “for instance incorrect pay or not getting hours through. Just Eat would refer you to Randstad, Randstad would refer you back to Just Eat.”
Just Eat’s Randstad partnership is an attempt to test a new model for the gig economy in the UK. As delivery apps struggle with staffing shortages and a new wave of legislation that is forcing them to assume more costs for their workforce, an entire sub-industry of staffing agencies are rushing to relieve platforms of the messy job of managing their couriers.
It’s unclear what percentage of platform couriers in the UK are now outsourced. Just Eat has turned to Randstad to contract 6,000 of its riders and drivers working across six UK cities, and it is using another staffing agency called Stuart to provide couriers in at least two more. On-demand grocery delivery service Gorillas has also been using third-party agencies, including a startup called Ryde, to supply extra workers during peak times.
This industry offshoot is becoming a test-bed, as staffing agencies rush to find ways to profit from delivery platforms, which have raised around $14 billion in funding since the start of the pandemic but are not necessarily providing better work conditions, according to the gig workers who work for them.
For the first six months that Thomas delivered restaurant meals for Just Eat in London, employed by Randstad, he was pretty happy with the arrangement—especially the £10.20 ($14.00 USD) hourly base rate he was guaranteed even if it was quiet. “Then they started bringing in new things that you would generally expect from gig economy companies,” he says.
Thomas has been unable to claim sick pay, which he says Randstad only gives to couriers if they are off work for more than seven consecutive days. In October, the flexibility he had been promised also disappeared when he was mandated to work at least 50 percent of his hours during peak times—on Friday, Saturday, and Sunday nights. Then, around Christmas, the app started telling Thomas to cover vast distances and collect orders from restaurants up to 10 miles away, limiting the number of jobs he was able to complete per hour and meaning he missed out on the bonuses he would get per pickup.
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Another subcontractor in Liverpool, who declined to give his name because he was worried about losing his job, has also encountered problems. He claims that Randstad does not compensate its remote couriers—who are able to start work from home instead of from a Just Eat courier hub—if they suffer bike problems while they are supposed to be working. “If I have a puncture or something happens with my bike, [Randstad] doesn't put me on pause, they switch off my app,” says the courier. “So even if it's one hour or two hours, it's not paid.”
In response to these allegations, Rachael Langton, operations director at Randstad UK, said the company’s “bespoke agency worker delivery model in partnership with Just Eat” allowed couriers to “enjoy a blend of job flexibility and benefits including hourly pay (higher than minimum/living wage), sick pay, holiday pay, and pension contributions.” Andrew Kenny, Just Eat UK's managing director, says the company takes courier welfare seriously. “Just Eat was the first delivery aggregator in the UK to offer a worker model where couriers receive an hourly wage, sick pay, holiday pay, and pension contributions,” he says.
Academics who study the platform economy are concerned that outsourcing’s main purpose is to shield well-known gig economy companies—which receive more scrutiny—from blame when workforce problems inevitably arise. “Subcontracting out allows them to say, ‘We don't have a relationship with this courier. We have a relationship with our subcontractor, and they take care of it,’” says Matt Cole, a researcher at Fairwork, a research group at Oxford University. But he still believes that Just Eat’s use of Randstad is a step in the right direction, even if the contracts are only temporary, lasting for six months. “This is a degree better than the self-employed, independent contractor standard that existed in the early days of the gig economy,” he says. “But it's essentially only climbing up one rung in the ladder of precarity towards the standard employment contract.”
It is not clear how much outsourcing is costing Just Eat, as the company and Randstad declined to share financial details about the contract. But in Randstad’s latest results, released in October 2021, the company reported 57 percent growth in the UK (though it did not provide a revenue figure), which is a much steeper increase than in any other European country that quarter. Speaking in an earnings call, Jacques van den Broek, the company’s CEO, attributed this growth to logistics, ecommerce, and the gig economy.
The following month, Just Eat CEO Jitse Groen spoke at Randstad’s capital markets day—an event designed to share more information about a company with investors and analysts—and said the company’s main challenge was hiring enough people, especially in markets where there was very low unemployment. “Obviously, hiring a lot of people in so many different markets is difficult for us, and therefore parties like Randstad help us set those contracts up and get us those people,” he said.
Outsourcing staff is not a new practice for Just Eat. In 2017, three years before it announced plans to give couriers more benefits, it had struck a deal with Stuart, which still allows riders to be paid per drop, unlike those working for Randstad. The company operated in general obscurity until it attempted to drop that fee from £4.50 to £3.40, prompting couriers in the British city of Sheffield to strike in December.
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“The price per drop is the straw that broke the camel's back,” says Bryn Atkinson-Woodcock, a driver and Sheffield treasurer for the union Independent Workers of Great Britain (IWGB), which is calling for £6 ($8.20) per drop plus mileage as well as payment if couriers spend more than 15 minutes waiting outside restaurants. Atkinson-Woodcut also wants Stuart to stop hiring drivers, arguing that its swollen numbers have already caused waiting times between jobs to stretch up to 20 minutes. Stuart insists it has not cut pay, and the new pay regime had a “neutral to positive impact on courier pay” compared to the previous system.
Couriers dispute this claim. Atkinson-Woodcock says he now has to work longer hours to earn the same amount. In response he has started supplementing his wage by working for rival delivery app Uber Eats as well. “I would literally be homeless if I was not working for Uber,” he says.
Stuart, which logged a £7 million operating loss in its latest results from 2020, does offer minimum wage, but only through a so-called “slot system,” where drivers can book back-to-back slots that will guarantee them around £120 ($164) per day. The company relied on this slot system to defend itself (unsuccessfully) against one courier’s claim in court that they were effectively an employee and should receive employee benefits. Morrison is now representing 200 more in a worker status claim against Stuart, and Atkinson-Woodcock is among them. Morrison questions whether slots do pay minimum wage once equipment and insurance costs are factored in. “Also, for the periods when those couriers are working off slots, if we're right and they are workers, they should have been receiving the minimum wage for that period as well,” he says. “There's no distinction in law between slot work and off-slot work.”
“Stuart takes concerns voiced by its couriers very seriously,” says Brendan Hamill, Stuart’s UK general manager, adding that the company has been hosting roundtables with couriers in Sheffield and Blackpool since the start of the strike and is “committed to being the best delivery platform for couriers looking for flexibility and financial stability.” Just Eat’s Kenny added that discussions with Stuart were ongoing about the Sheffield strikes.
But the lack of attention the Sheffield strike has received demonstrates one reason why platforms turn to staffing agencies in the first place, according to Ben Wray, who runs the Gig Economy Project, a media network for gig workers. “I think Just Eat got a little bit of criticism over this strike, but it's really not been the focus. The focus of the criticism in the media has been Stuart. So you can see the way subcontracting is also useful, just to create distance in the media and the public's mind.”
Rival apps are also beginning to copy Just Eat’s outsourcing model. Gorillas is among the platforms leaning on rival outsourcing company Ryde’s workforce, not only for extra riders during peak times but also for warehouse staff to provide “flexibility,” according to Alexander Brunst, global vice president of sustainability, public affairs, and corporate social responsibility at Gorillas.
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Ryde did not reply to multiple requests for comment. But demand for its services is already “staggering,” with revenue for the year reaching seven figures, according to Seb Wallace, a venture capitalist at Triple Point, an investment manager which backed the company in a £2.5 million seed round in August 2021.
In an ideal world, the platforms don’t want to manage the customers, the restaurants, or grocery stores as well as the couriers, says Wallace. “The drivers are a requirement and a really key part. But it is a part that [the platforms] find difficult, and it's very time-consuming.” Ryde also enables delivery platforms to forget about rider retention, he adds, claiming the number of riders working for Ryde is in the tens of thousands. “If you don't treat a rider well, and by ‘well’ I mean, well paid, given breadth on sick pay or leave, support when they have technical issues with their vehicles, then you lose the rider.”
But Alex Marshall, president of the IWGB, which represents couriers working for the major delivery platforms, says the Ryde couriers he has encountered working for Ocado and Gorillas have not been working on contracts that entitle them to holiday or sick pay. He’s concerned these outsourcing companies could create different tiers of workers—so companies can advertise that they use employees while also taking advantage of a flexible workforce who are not entitled to benefits or guaranteed minimum wage. “Subcontracting is starting to creep into different parts of these businesses,” he says. “These guys are literally working side by side, but one guy has been treated as an employee, one guy has been treated as an independent contractor.”
Until now, gig companies have been the target of legal cases and legislation across the world. If outsourcing becomes the norm, staffing agencies may soon fall under the microscope too. Platforms will “be aware that the liability is usually with the contracting company,” says Leigh Day’s Morrison. The IWGB’s Marshall agrees that accountability is muddier when outsourcers get involved. “But to be completely honest, from the workers perspective, they don't necessarily care that much about being outsourced,” he says. “As long as they're getting the pay and rides that they want, they don't really mind.”
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