Shares in Deliveroo shot up 8.5 per cent today after Britain’s Court of Appeal ruled that its riders were self-employed, dismissing an appeal by the IWGB union against past judgements on their status.
The boss of Deliveroo saw his fortune balloon by nearly £25m after the company’s riders were dealt a blow in their fight to collectively negotiate pay.
Will Shu, Deliveroo’s founder and chief executive, owns around 6.4 per cent of the business, and the value of each one of his nearly 116 million shares rose in value by as much as 21.5p after the decision.
In total he added around £24.9m to his fortune on Thursday, mainly after the justices’ decision.
US internet giant Amazon is the largest shareholder in Deliveroo after having bought a big stake in May 2019. The value of its shareholding rose by £46.3m.
Deliveroo said it was the fourth UK ruling which had determined its riders were self-employed, following decisions by the Central Arbitration Committee and two High Court judgements.
‘’The gig economy fortress has successfully defended itself against the latest flurry of arrows designed to pierce its walls,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“The fact that Deliveroo successfully defended its business model once again has cheered investors with the share price climbing rapidly.”
The ruling stands in sharp contrast to the UK Supreme Court’s recent decision granting workers’ rights to Uber drivers.
The Court of Appeal said that the couriers cannot form a collective bargaining unit because they are not in an “employment relationship” with the company, Deliveroo’s attorneys confirmed.
The ruling could benefit Deliveroo investors, after concerns over the status of its workforce was one of the reasons for its underwhelming flotation in April.
The company has always maintained that its riders choose to be self-employed because of the freedom it gives them to do other jobs.