Just Eat to move away from gig worker model, CEO says

Dive Brief:

Just Eat Takeaway CEO Jitse Groen told BBC News that he intends to end the company's gig worker model at Just Eat across Europe, preferring to run his company with employees who receive benefits and workplace protections. An employment model has been used at Takeaway.com, which he founded 20 years ago.
The company is evaluating if this would work in Canada and will also look at this model later in the U.S. However, the company could keep independent contractor models in some countries, but with the addition of potentially paying insurance for them.
Company orders rose 34% to 149 million during the first half of the year compared to the same period in 2019 across the U.K., Germany and The Netherlands, the company's three largest European markets, according to the BBC.

Dive Insight:

Takeaway's employed driver model in Europe is a bit of a rarity in the industry, especially compared to the U.S., where the biggest aggregators rely on 1099 independent contractors. Takeaway's model allows drivers to choose the days and hours they want to work via an app and pays drivers an hourly salary even during the waiting time.

How this model could be used in North America is still up in the air, but if Grubhub were to take on this model, it would become the largest company in the U.S. to employ drivers. Waitr used to be one of the only companies to employ its drivers, but the company switched to the 1099 model earlier this year, which reduced expenses and helped the company to grow its driver network.

Third-party delivery aggregators, and other gig economy companies, have received a fair amount of backlash from state governments, including California and New York, for using independent contractors. Ridesharing giants Lyft and Uber were ordered by a California judge on Aug. 10 to reclassify their drivers as employees under the AB-5, which went into effect on Jan. 1, 2020. Uber has already threatened to shut down its business in the Golden State, but said it wouldn't likely close down its food delivery service.

Uber, DoorDash, Lyft, Postmates and Instacart, have all raised millions for a November ballot measure in California that would allow for drivers to stay independent contractors while giving them more worker protections like minimum earnings, expense reimbursement and insurance for workplace injuries.

At the same time, there have been compromises in other jurisdictions. In May, DoorDash and the Pennsylvania Office of Attorney General partnered to provide financial, health and childcare support for DoorDash and Caviar workers to offer more support during the novel coronavirus pandemic.