Deliveroo has warned it may have to rewrite its business model if forced to provide its riders with holiday and sick pay.

The delivery company revealed it was facing investigations in Britain, France, Spain, the Netherlands and Italy over the legal status of its riders.

The disclosure was made a prospectus published in preparation for its £9bn stock market listing.

Deliveroo’s ‘gig economy’ business model deems its riders to be independent contractors, paid by the number of meals they deliver rather than an hourly wage, which reduces its operating costs.

Uber recently lost a Supreme Court case which found that its drivers must be treated as workers rather than self-employed – though the company said this finding had no implications for its Uber Eats food delivery business.

Deliveroo has argued that the Supreme Court ruling does not create a precedent for its couriers and claims that its riders value the flexibility it offers.

However, the London-based company warned that it could have to tear up its business model if it has to treat couriers as workers.

“If we were required to make changes to the basis on which we engage riders across a number of our markets … this could affect our ability to continue operating in those markets or require material changes to our model,” Deliveroo said in its stock exchange filing, which was published last night.

The lossmaking company said yesterday that it was targeting a valuation of between £7.6bn and £8.8bn when it prices the IPO at the end of the month.

 

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