Sunday 21 August 2016 9:24 pm

Deliveroo chief says employment laws are behind the times

Deliveroo boss William Shu has said the UK's employment laws need updating, after the food delivery startup tried to temper an ongoing dispute with its riders over a new trial pay structure.

Shu says he hasn't had contact with government yet over the issue – although it has issued a warning that the firm needs to pay its workers the minimum wage unless a court rules them self-employed.

In an interview with The Sunday Times, Shu said that the workplace is changing as individuals seek more flexible options, and argued that regulations needed to change with it.

He said: “In the economy as a whole you're going to see more of this kind of work. There are laws drawn up years ago that may be less relevant for today's economy.”

Read more: Cheers! Now Deliveroo's delivering wine, beer and cocktails

It marks the latest episode of booming startups tackling regulation restrictions. Ride-hailing app Uber, which is rivalling Deliveroo with its UberEATS enterprise, has been battling TfL over new "bureaucratic" rules, including a written English test for drivers, which it said would threaten to hinder its business. Last month it was also taken to a London employment tribunal by two of its drivers, with disagreement brewing over whether they should be considered workers or self-employed contractors.

The grey areas associated with regulation for startups, which by nature are often disrupting the status quo, have come under greater scrutiny with the rise of the so-called gig economy.

Deliveroo has argued that its trial pay scheme came about specifically from drivers' requests for flexibility.

“We didn't communicate in the most effective manner at all,” Shu said. “Just explaining that under the new scheme you would earn more money and work more flexibly sounds pretty good to people.”

Read more: Deliveroo just raised $275m to fend off Uber

Drivers protested in front of the firm's headquarters about the prospective scheme where they would collect £3.75 per delivery, rather than a minimum hourly rate of £7 plus £1 per delivery.

Talks led to the startup changing its plans and guaranteeing at least £7.50 an hour for busy periods and allowing drivers in the trial areas to opt out.

“Without the riders, we'd have no business,” Shu added. “Looking after their long-term interests is paramount.”