Uber and Deliveroo’s UK bosses grilled by parliament’s business committee

One of the reasons that Uber and Deliveroo are so popular is because they’re cheap. One of the reasons that they’re cheap is because these “gig economy” employers have no formal fixed contracts. The upside of this, as the businesses pitch it, is that workers have the flexibility and freedom to work their own hours. The downside, highlighted by workers’ rights campaigners, is that these loose bonds of employment mean that the companies are under no obligation to offer sick pay, holiday or the minimum wage.

Now MPs are taking an interest in these practices, and today the British government’s Business Committee played host to Uber’s UK head of policy, Andrew Byrne; Deliveroo’s UK and Ireland managing director Dan Warne; and Hermes’ director of legal affairs, Hugo Martin.

When asked about the cost of treating its drivers as workers rather than self-employed contractors, Byrne suggested it would be prohibitively expensive. “I don’t have the precise figures… but I’m certain it would be the tens of millions certainly,” he said. “It would change the nature of the relationship we would have with drivers.”

If forced to comply with new regulations for its workers, the implication is that this extra money would come from a higher cost to consumers. That’s certainly the approach that Warne took when answering on behalf of Deliveroo, as he explained that additional costs like National Insurance contributions would add around £1 to the cost of each delivery – which currently sits at £2.50.

Would people pay the extra? That depends on exactly how much more it costs, I suppose – but there’s certainly a large group of people who value cheap services ahead of the welfare of those that provide them. Just take a look at how people reacted to TFL’s decision to ban Uber from the streets of London for a taste of how dimly some customers view government intervention on the more dubious elements of the gig economy.