Friday, March 31

France has taken a drastic measure against Deliveroo managers: send them to jail

Deliveroo takes another hit for its fake self-employment model with delivery people. This time it was France, where a criminal court in Paris has decided to condemn the company for abusing this model. And French justice has been forceful, because in addition to a fine of up to 375,000 euros, three of the directors have been sentenced to prison terms.

Sentences of 12 months in prison and prohibition to run a company. They will not go to jail because they are short sentences and they are not executed except for recidivism, but the French court’s resolution is very clear, imposing criminal offenses on three former CEOs of Deliveroo.

Two of them have been sentenced to 12 months in prison and a fine of 30,000 euros. In addition, the Justice establishes that they are prohibited from running a company for the next 5 years, to prevent them from committing an equivalent crime elsewhere. The third executive has been sentenced to four months in prison and a 10,000 euro fine.

“Complicity in the hidden work”. France has condemned these managers for what they define as “hidden work”. According to the French justice, Deliveroo is responsible for a “systematic concealment” of the labor regulation of delivery men. This is a phenomenon equivalent to the case of “false self-employed” in Spain, where the Supreme Court has already ruled that the relationship of companies such as Deliveroo with the ‘riders’ was of a labor nature. A sentence that would later have its replica in what is known as the ‘Rider Law’.

Deliveroo leaves Spain: the delivery company proposes an ERE in September and will cease its operations throughout the country

In Spain the matter is settled and Deliveroo left our market… Last summer, Deliveroo announced that it was leaving Spain due to difficulties in the viability of the business in our country. Unlike companies like Glovo or Just Eat, which hire their delivery men, Deliveroo proposed an ERE to its few hires and was left without delivery men.

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…but in Europe the debate continues. Despite the fact that Spain has been a pioneer in the regulation of these delivery companies, the matter is still open in Europe. At the end of 2021, the European Commission presented a future Directive with which to try to regulate up to 4.1 million false self-employed. However, it has not yet come into operation. The decision of the French court supposes an impulse to regulate this sector.

Deliveroo’s strategy remains the same: appeal, appeal, appeal. Equivalent to what they did during their time in the Spanish market, Deliveroo maintains that hiring their delivery men would increase costs and they continue to defend their model.

Deliveroo has no plans to leave the French market at the moment and will appeal the decision, arguing that the Court’s decision refers to an early version of its business model with riders, but that they currently use another model. This “updating” of their relationship with the delivery men was also used in Spain, but in the end the Rider Law made it impossible for them to continue maintaining the self-employed delivery model.

The big Delivery companies collapse in the stock market. We will have to wait to see if the European Directive causes a similar effect in the rest of the countries. Over the past six months, Deliveroo’s shares have fallen by around 60%. A similar effect to the rest of the food delivery companies, where giants such as Delivery Hero, Just Eat, Uber Eats have lost billions in value.

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