After a decline in customer demand, the food delivery service Just Eat has decided to lay off 1,870 employees in the United Kingdom.
The company announced that it would stop using its own couriers and instead rely on third-party contractors, which would result in the loss of 1,700 jobs. Also, 170 operational responsibilities will be eliminated.
A warning of six weeks’ duration has been provided to the concerned drivers and riders.
It comes after the company had a 9% drop in client numbers during the previous year as a result of Covid laws being loosened, which encouraged customers to visit bars and restaurants again.
The impacted couriers are employed by the “Scoober” service offered by Just Eat. They are considered to be workers by the company and receive a set hourly rate of pay in addition to additional benefits, including sick pay and an uncapped bonus.
The company has stated that the reorganization will not have any effect on the services that it provides, despite the fact that the majority of its couriers in the United Kingdom are independent contractors who do not receive such benefits.
A representative for the company said, “We have proposed to move away from the labor model for couriers, which is a small component of our overall delivery operations – running in certain sections of six UK cities.” This is a minor part of the company’s entire delivery operations.
Just Eat, which is the most prominent takeaway delivery firm in Europe, has been a vocal backer of proposals to make its couriers in Europe full workers, believing that this will be more ethical. Just Eat is the largest takeaway delivery company in Europe.
Riders who are also employees are entitled to perks and have a higher level of protection in the workplace.
On the other side, while the majority of Just Eat’s riders are employees in the EU, independent contractors deliver more than 90% of the company’s meals in the UK.
The company has stated that it is at a competitive disadvantage since it employs workers in the UK rather than people who are self-employed.
In the UK, competitors such as Deliveroo and Uber have adopted a model that relies on independent contractors.
Aside from the United Kingdom, other countries where Just Eat operates under the contractor model include Ireland, Slovakia, and the majority of France (with the exception of Paris), where its riders are considered to be full-time employees.
This comes a month after Deliveroo announced it will eliminate approximately 350 posts, the majority of which were located in the United Kingdom, due to “unpredictable economic headwinds.“
Deliveroo announced a loss of £294 million for the year last week as a result of customers cutting back on their spending due to the rising cost of living.
