Insight: Gourmet meals on bicycle wheels

Deliveroo riders have to put down a deposit for their uniforms. Picture: John Devlin

“We tend to hang around at the statue while we’re waiting for orders, but if it’s really cold then we do ride about while we’re waiting,” he says.

The delivery cyclists, weaving through city traffic in their blue and turquoise jackets and loaded down with box backpacks filled with food, are becoming a familiar sight on Scotland’s streets.

Deliveroo riders north of the border now deliver takeaway meals from 600 restaurants in eight towns and cities, with 85 per cent of the delivery workers using bicycles and the rest travelling by motorised scooter.

The service has revolutionised the food delivery sector from its previous focus on the likes of pizza and takeout-only noodle dishes to gourmet meals prepared in the kitchens of top restaurants.

But now the iconic blue kangaroo has a new rival in town: controversial taxi firm Uber’s food delivery arm, UberEATS, which launched in Edinburgh last month, and began making deliveries in Glasgow on Thursday. Both companies use sophisticated software technology to match their drivers with orders from nearby restaurants, where they pack their food into insulated backpacks to deliver to the customer’s door for a small delivery charge.

Online takeaway food delivery has become a huge market in recent years. More than half the British adult population have had a takeaway brought to their home in the past six months, according to research carried out last year by market research firm CGA Peach – while one in five receive a food delivery at least once a week.

Just a few years ago, Just Eat and Hungryhouse, with which it announced a merger at the end of last year, were the only online delivery options available. But now half of all takeaways are ordered through an online delivery service, according to the market research company.

However, while Just Eat uses restaurants’ own delivery services combined with its software, which allows the consumer to browse takeout options from dozens of eateries online before ordering via the website, Deliveroo and UberEATS supply their own army of delivery riders, or “roos” as Deliveroo prefers to call them. They can deliver from restaurants which would otherwise not be regarded as a typical “takeaway”, expanding the sector to include the premium end of the market.

Leigh Sparks, professor of retail studies at Stirling University, believes that the market for on-demand deliveries will continue to grow.

“It is all to do with the theme of time convenience,” he says. “You don’t have to pick up the phone, then get in your car and go off to the chip shop.

“It was previously really restricted to a sector or specific kind of food – now it is much wider. There is also an element of eating restaurant food getting in the way of other things people want to do. Eating out used to be an occasion, now it doesn’t have that same feeling.”

Services such as Amazon Prime, which can transport almost anything to the consumer’s door in 24 hours, and even department store chains such as John Lewis, which can deliver products to a local supermarket a day later, have fuelled consumer demand for instant delivery of products bought online.

“The way groups think now is not to consider speaking to someone on the phone and then actually going somewhere in person and picking something up. A mobile or a laptop is now the natural extension of a right and left arm for a lot of people and bunging an order in online in 30 seconds, and it turning up almost instantly, is how they want things to work.”

A spokeswoman for Deliveroo says Scotland is one of the company’s “biggest markets”.

“Deliveroo has revolutionised the way people order food because the majority of restaurants we partner with did not previously have a delivery service, giving customers access to a greater choice of food delivery options,” she says.

Yet while the convenience is welcomed by consumers, the conditions are not always ideal for the delivery riders themselves, who are on zero-hours contracts and are not entitled to the most basic of workers’ rights – including National Minimum Wage or sick pay.

Deliveroo riders in Scotland have told Scotland on Sunday how the £150 deposit for their uniform – which includes a jacket, waterproof trousers and a branded cycling top – is taken out of their first few pay packets, an amount which is eventually refunded when the rider leaves the company and returns the uniform.

While some rate it highly as a flexible way to earn extra cash while studying or working in another job, those trying to rely on it as a primary source of income are more critical.

Johnny (not his real name) explains how he has to sign up for shifts every week. “It’s first come, first served as to who gets the shifts,” he says. “There’s no certainty, but there’s always people who cancel their shift; so 95 per cent of the time you’ll get the shift you want.”

But he recognises that he is only using the job as a source of extra income to pay for luxuries while he is a student.

“Working there has been OK and I am going to continue to work for them in another city when I move house,” he says. “For students, it’s a perfect job – it pays more than the minimum wage for me. It is OK to work full time if you’re doing it on a short-term basis, but it’s not really suitable if you’re working long term.”

His colleague, Matthew, also a student in Aberdeen, agrees.

“It isn’t the job for everyone – it’s not going to be any good for a single mum with two children to support, but for me it’s great.”

He adds: “I’m getting paid to ride my bike – I love my job.”

In Scotland, the company uses two pay models: one a base rate of £6 an hour, plus £1 for each delivery completed – and another, used only in Glasgow, where riders receive no guaranteed base rate, but receive £3.75 for each delivery.

UberEATS, however, states that it pays riders in Edinburgh and Glasgow a minimum guaranteed fee of between £8 and £12 an hour, depending on the time and day, as long as they manage to accomplish one job an hour.

Matthew explains: “On a typical shift, you get maybe two jobs an hour, but in the winter, when people can’t be bothered to leave the house to get their food, it can be really busy. It’s the same in exam time when students want food brought to their door.”

However, one former Edinburgh-based courier who quit a previous job earning him £22,000 a year to work at Deliveroo – where he says he was told his earnings could reach £27,500 – claims that the shifts he was required to work to allow him to make even a basic living wage were “ridiculously long and extremely dangerous”.

“Generally easy job to do but failed to meet the original (realistic) earnings and then some,” he wrote on a jobs site review board.

Other riders are frustrated at having to wait for orders at restaurants – time they are not compensated for – eating into precious minutes when they could be picking up more jobs.

London law firm Leigh Day has threatened legal action on behalf of a group of 20 Deliveroo drivers, claiming that they are not self-employed and are therefore being unlawfully denied employment rights and protections.

Annie Powell, a lawyer in the employment team at Leigh Day, says: “The idea that Deliveroo riders are self-employed contractors in business on their own account and that Deliveroo is a customer of each rider’s business is absurd.”

The UK government is looking at the problem through two separate investigations.

One is being conducted by the Department for Work & Pensions, which is dealing predominantly with tax issues for “gig-economy” workers such as food delivery riders. A second, the Taylor Review, which is headed by the Royal Society of Arts chief executive Matthew Taylor and will look at the rights of self-employed workers, is due to report later this summer.

A similar debate has been ongoing over the rights of drivers in other kinds of courier firms, such as Hermes, which was investigated by HMRC last week.

Joan Cradden, a partner at Brodies law firm in Edinburgh, says: “For a few years now, the courts have been commenting on these cases, suggesting that the law is unsatisfactory and will not solve the issues without government intervention. That is really why we have a number of committees and inquiries looking at it.”

However, in job adverts Deliveroo stresses the “freedom” its model delivers: “Be your own boss – work as a self-employed contractor,” an advert for a job in St Andrews says, claiming that workers can earn “up to” £16 an hour.

Matieu Proust, general manager at UberEATS, says that a typical rider at his firm works 15 to 20 hours a week.

“It is all about the flexibility,” he says. “People can work where and when they want. Some of our couriers might work full-time in a bank and want to earn some extra money.”

In London, where UberEATS has been operating for about a year, many riders are working for both UberEATS and Deliveroo in a bid to increase their pay – often “swapping companies” several times within a shift.

Some customers there have claimed that drivers have delivered their food wearing the uniform of the rival firm. Proust laughs when he is asked if that is encouraged among UberEATS staff. “We are back to flexibility again,” he says. “If drivers want to choose different economic opportunities, then yes.”

Just Eat, which launched in the UK in 2006, was the forerunner of its younger rivals. Unlike Deliveroo and new kid on the block UberEATS, which has a presence in just five UK cities so far – although it recently revealed plans to roll out to 40 – it covers almost the entirety of the UK. It tapped into a gap in the market at a time when many independent restaurants and takeaways did not have the technology to offer orders through their own websites.

It also has a strong traditional marketing presence, paying out for TV and radio ads using the slogan “Don’t Cook, Just Eat”, as well as billboards and advertising hoardings. Its chief marketing officer, Barnaby Dawe, admitted in a recent interview with Marketing Week that its promotional budget is a “whopping figure”.

Yet, although its business model at the moment appears to be more traditional than the recently created courier services, the FTSE 250 firm – which launched on the stock market in 2014 – is performing strongly and still holds a far larger market share than either Deliveroo or UberEATS. In a trading update released last week, Just Eat revealed that its revenues had jumped by 46 per cent to £118.9 million, up from £81.5m a year earlier.

If its £200m merger with rival Hungryhouse goes ahead – it is currently the subject of an investigation by the Competitions and Markets authority amid anti-competition fears – it will create an even bigger market giant.

McDonald’s has also recently announced that it will trial fast food deliveries in-house, starting with a pilot scheme in London.

But, while the delivery companies with their own fleets of cyclists have been lauded for opting for environmentally friendly modes of transport, on social media Deliveroo’s riders have come under fire in Scotland for dangerous cycling and failing to use their lights after dark. In 2015, a Deliveroo moped rider was killed while delivering a takeaway in east London.

Twitter user Alasdair Thomson wrote: “@Deliveroo Your bike couriers seem exempt from the Highway Code. Across Edinburgh they run red lights, ride on pavements and don’t give way.”

However, the company says it takes safety “very seriously”. Deliveroo, which carried out a safety overhaul in conjunction with road safety charity Brake last September, says it provides lights and helmets to riders free of charge and encourages their use “at all times”.

But even rider Johnny admits there are hazards in the job.

“I was knocked off my bike once,” he says. “I was on my way to work and a car coming the opposite way cut right in front of me.”

But he remains dedicated, even in the face of adversity.

“I landed on my feet and the bike somehow was okay,” he says. “So I just got up and rode in to do my shift.”