Just Eat’s employment U-turn won’t travel

LONDON, March 22 (Reuters Breakingviews) – Just Eat Takeaway (TKWY.AS) Chief Executive Jitse Groen is speaking out of both sides of his mouth. His 3.8 billion euro food delivery company on Tuesday said it would stop offering UK couriers minimum full-employment benefits including paid sick leave and holiday pay. That marks a U-turn from Groen’s 2021 claim that the gig worker model “led to precarious working conditions”. Just Eat Takeaway will employ food-delivery drivers in the UK as independent contractors or through third party agencies.

The U-turn will reduce costs, but only marginally. Fully employed workers in the UK only delivered a low single-digit percentage of total orders in the country. Since Britain and Ireland only generated 23 million euros of adjusted EBITDA in 2022, the savings look minimal. The bigger issue is how to turn the tide in markets such as southern Europe, Australia and New Zealand, which collectively generated an adjusted EBITDA loss of 161 million euros.

Sacrificing workers’ rights amid a cost-of-living crisis also doesn’t make Groen look good. True, peers such as Uber Eats and Deliveroo (ROO.L) are hiring contractors in the UK after a court ruled in 2021 that riders are self-employed. But with the European Union passing the legislation to improve workers’ rights, Just Eat Takeaway seems to be exploiting a Brexit loophole. It’s hard to rely on one’s faith during hard times. (By Karen Kwok)

follow @Breakingviews on Twitter

Capital Calls – More concise insights on global finance:

Syngenta’s weakening of crops may dim IPO prospects read more

Maserati listing would need more engine power read more

Credit Suisse bump trade looks over-optimistic read more

Ryan Reynolds flexes as corporate convert read more

FedEx delivers, for now read more

Editing by Lisa Jucca and Streisand Neto

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence and freedom from bias.