Deliveroo found guilty of abusing riders' rights in France
Two former managers of Deliveroo (ROO.L) were given suspended one-year prison sentences and fined 30,000 euros ($32,380) by a French court on Tuesday for abusing the freelance status of cycle riders working for the British takeaway delivery platform.
The company was also fined the maximum penalty of 375,000 euros and will have to publish the court decision on Deliveroo's French home page for one month.
Deliveroo said it would appeal the decision.
The ruling may reverberate 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.
Under French law, employee status grants rights, including unemployment benefits, social security and pension contributions.
The administrative investigation, which reviewed a period extending from 2015 to 2017, and the subsequent court hearings showed that Deliveroo had imposed an almost permanent surveillance and control over riders' work while they were connected, judge Sylvie Daunis said.
That included allocating riders long time slots to be sure Deliveroo had as many people on hand as possible during the weekend, and telling drivers who refused that they would not be allowed to work for the platform the following weeks, for instance.
Even though the riders were freelance, the court also found that Deliveroo unilaterally changed the criteria under which pay increases were defined or the minimum time needed to be online to qualify as a rider.
"This set of elements characterizes a situation of almost permanent legal subordination," Daunis said, referring to a key element that defines the employee status in France.
Shares in Deliveroo, which have lost more than 70% of their value since they listed at 390 pence in March 2021, closed down 5% at 108 pence on Tuesday.
Deliveroo said in a statement that it "categorically contests" the French court's ruling.
"The judgement goes against previous decisions in civil courts covering the same historic period, which have repeatedly found riders to be self-employed," a spokesperson said.
"While this case does not concern today's operating model, we strongly disagree with this judgement and the basis on which it has been made, and we will appeal."
The company said it would maintain operations in France.
Its 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.
Former riders have sued Deliveroo for alleged abuse of their freelance status and claim the company should have hired them as employees.
Deliveroo withdrew from Spain last year after the government said food delivery companies had to employ their couriers. The British company said it wanted to focus its investment on other markets where it had or could achieve a leading position.