Food delivery platform Deliveroo guilty of abusing freelance status of its riders; 2 former bosses face suspended one-year prison sentence

A French court has found U.K.-based food delivery platform Deliveroo guilty of abusing the freelance status of its riders. As part of the ruling, two former bosses of Deliveroo were also given suspended one-year prison sentences and fined 30,000 euros ($32,380), according to a report by Reuters.

Deliveroo, which operates in over 500 towns and cities across 14 markets in Europe and Asia, was also fined the maximum penalty of 375,000 euros. The court also ruled that the company must publish the court decision on Deliveroo’s French home page for one month.

It all started after former riders sued Deliveroo for alleged abuse of their freelance status and claim the company should have hired them as employees. Under French law, “employee status grants rights, including unemployment benefits, social security and pension contributions.”

In its response to the ruling,​ Deliveroo said that it “categorically contests” the French court’s ruling and was considering whether to appeal. The company also added that it will continue to maintain operations on the French market.

Its statement said the court decision referred to an early version of its operating model and had no consequences for the way it operates today.

“Our model has since evolved in order to be more in line with the expectations of our delivery partners, who want to remain independent …Deliveroo will continue to operate with a model that offers these independent providers a flexible and well-paid business,” the company said.

Founded in 2013 by Will Shu and Greg Orlowski, the London, England-based Deliveroo operates in about 20 countries including Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, Taiwan, United Arab Emirates, Kuwait, and the United Kingdom.  The startup makes money by charging restaurants a commission fee, as well as by charging customers a fee per order. It currently operates in two hundred cities.

The ruling may have a ripple effect outside France as the gig economy, built largely upon digital apps and self-employed workers, faces a number of court challenges that may redefine working conditions.

We covered Deliveroo a little over a year ago after the Amazon-backed food delivery startup made its London IPO debut on March 31, 2021.