Amazon-backed British food delivery start-up Deliveroo plans to give £16 million ($22m) of payments to its riders globally as part of the company's £8 billion stock market listing.
The payment to be made from a “Thank You Fund”, would be launched on the day of the company’s initial public offering. Active riders in the 12 markets where Deliveroo operates, including the UAE and Kuwait in the GCC, will be eligible for the payment, the company said in a statement on Sunday.
The online food delivery platform, which might qualify among the biggest share sales in Europe this year, expects more than 36,000 riders globally to receive payments. The company has more than 110,000 delivery riders across its operating markets. The number of orders delivered by riders will determine the size of the payment they receive. Amazon acquired a 16 per cent stake in the company last year after gaining regulatory approval in the UK.
Deliveroo will make payments of £10,000, £1,000 and £500, or local currency equivalents. All riders who have worked with Deliveroo for at least one year and completed 2,000 orders will receive £200.
The £10,000 payment will be made to those riders who have completed the highest number of orders in each market and hundreds of active riders globally are set to receive it.
The average payment per eligible rider will be £440 and over one quarter of Deliveroo’s global rider fleet are expected to benefit from the scheme. The percentage of riders eligible for each of the different awards will be consistent across all markets, the company said.
“Riders are at the heart of our business, and we want to reward their efforts that have helped Deliveroo become what it is today,” Will Shu, founder and chief executive of Deliveroo, said.
“Over the last year riders have helped us do so much more than just deliver great food, having supported businesses and enabled vulnerable people or those self-isolating to stay safe indoors throughout a global pandemic. We’re pleased to be able to say thank you.”
Last week, Deliveroo announced its intention to list on the London Stock Exchange following the UK's plan to overhaul its stock market regulations in a post-Brexit shake-up.
Deliveroo, founded in the UK capital by Mr Shu in 2013, said it would use the dual-class share structure proposed by Jonathan Hill in a review, which recommends updating regulations around free float requirements, dual-class structures and special purpose acquisition companies.
The changes will allow founders to retain control over their companies by giving them deciding votes on key decisions such as corporate takeovers.
Deliveroo said its “potential future float” would provide Mr Shu “with the stability to take decisions to enable the company to execute on its long-term strategic vision".
The Deliveroo public float is one of the most eagerly anticipated IPOs that will mark the biggest new share issue in Britain for three years. Initial reports expect the listing to take place this spring.
Deliveroo said its commitment to London was underscored by the company’s role in supporting 47,000 jobs in the UK, including 38,300 in the restaurant sector, as well as thousands of self-employed riders since it started operations eight years ago.
The company has seen demand for its services soar during the pandemic and it expects its business to grow further this year.
“Online food delivery is a large, growing market with low online penetration, which the company believes presents a significant opportunity,” the company said on Sunday.
It plans to expand its ‘Editions’ delivery-only kitchens and on-demand grocery, as well as new tech tools to support restaurants and offer riders more work.
Deliveroo works with more than 140,000 restaurant partners across 800 cities. Despite its success, the company has come under scrutiny in Britain, France and Spain, as its freelance delivery riders complain of working conditions, reflecting wider concerns over their rights in the gig economy.