Food delivery riders in Australia underpaid by up to $322 a week

© Michele Tantussi/Getty Images
Deliveroo

Food delivery bike couriers are being underpaid by up to $322 a week compared with minimum rates of pay and superannuation in the transport award, according to new union statistics.

The Young Workers Centre – an initiative of the Victoria Trades Hall Council – conducted a survey of more than 240 riders, revealing most are engaged on a “take-it-or-leave-it” basis and almost all are paid per delivery, with no minimum rates of pay.

Bike couriers at companies such as Deliveroo are employed as independent contractors, meaning they are not paid the award minimum rate of $25.81 per hour they would be entitled to if classed as employees.

According to the centre, a typical courier working 24 hours a week including six hours at the higher weekend rate would receive $681 under the award and $65 in super.

Although pay was as high as $18.50 an hour with a $2.50 delivery commission when delivery apps entered the market in late 2015, the Transport Workers’ Union argues that through a series of unilateral pay cuts conditions have ratcheted down to flat rates of $10 a delivery, or as low as $5.90 for some deliveries under new dynamic pricing systems.

A typical courier paid $10 per delivery might make 53 deliveries, for a weekly pay packet of $530, about $151 under the award, the rider snapshot said.

Under an alternative dynamic pay method of $3.50 per pickup, $1.80 per delivery and a variable fee based on time and distance, a courier might earn as little as $424 a week, some $322 less than the award rate when superannuation is factored in.

Unions have been rocked by the Fair Work Ombudsman’s claim in June that ridesharing company Uber does not directly employ its drivers, fearing that it will solidify the existing practice in the gig economy to classify workers as independent contractors.

In 2018 the ombudsman took court action against food delivery company Foodora, alleging that bike couriers are employees, which the administrators of the now-collapsed Foodora Australia admitted is “more likely than not” to be true.

However, Uber Eats and Deliveroo maintain their couriers are independent contractors. In an unfair dismissal case before the Fair Work Commission which began on Monday, the TWU is seeking to prove Uber Eats drivers are in fact employees.

The survey found that the average age of riders is 26, while three-quarters are temporary visa holders such as international students, or people on working holiday or bridging visas. Just one in 10 surveyed was an Australian citizen.

Only 2% of riders said they would not negotiate for a pay rise as they were happy with current pay rates, while 60% said it is “not possible to negotiate a pay rise”.

One-quarter of surveyed couriers had been in an accident, with one in eight sustaining injuries such as concussions, knee injuries, broken bones or dislocations.

On Wednesday the TWU will release a proposed charter of rights for delivery drivers including the minimum wage, paid wait times, penalty rates, an allowance for bad weather and fully-funded workers’ compensation.

The TWU national secretary, Michael Kaine, said Uber and Deliveroo “need to sign up to the charter of rights” to fix what the TWU alleges is the “appalling practices” of “ripping workers off … and throwing [them] on the scrap heap when they are injured or no longer useful”.

“Through the charter [riders] want an end to the ‘take-it-or-leave-it’ practice where they carry all the liability and Uber and Deliveroo accept none of the responsibility,” he said.

“Riders are taking this stand amidst the absence of any semblance of interest from the federal government which has outright refused to support them.”

VTHC secretary Luke Hilakari said the delivery riders snapshot “paints a picture of extreme worker exploitation in the food delivery industry”.

“The likes of Uber and Deliveroo need to accept that if they want to operate in the Australian market, they need to abide by Australian employment law.”