The scale of the gig economy in the delivery sector
The gig economy is an umbrella term to describe the casualisation of the workforce. The growth of the UK logistics and delivery sector has coincided with its rise, which has ridden in on the UK’s relatively deregulated labour market with weak labour protections, and the rise of smartphone usage and artificial intelligence.
‘Gig’ delivery drivers and couriers are not classified as employees but rather ‘independent contractors,’ theoretically able to choose their own hours, select their own customers and enjoy a better quality of ‘flexible’ work. In practice though, this has sometimes meant workers making less than the minimum wage, enjoying none of the traditional employment protections such as sick and holiday pay, and having to work very long hours for low pay, as well as having to take on the risks of operating the business themselves e.g., paying for their own insurance, fuel, vehicle, etc.
However, there is no standardised way of working when it comes to delivery companies. Individual companies all have different ways of classifying workers, with some opting for self-employed to other delivery companies actually employing workers on secure contracts. Below, we outline some of the employment terms and conditions of different delivery companies and restaurant delivery companies. See also the feature below on Fairwork's ranking of several of the companies we have covered.
In early 2019, the GMB successfully managed to broker a ground-breaking collective bargaining deal with Hermes.
Now, even though couriers are still self-employed, they have the option to go for self-employed plus, which brings benefits such as holiday pay (pro-rata up to 28 days), a minimum wage of least £8.55 per hour, minimum rest breaks, protection against unlawful discrimination and full GMB representation.
97% of Royal Mail’s workforce are on permanent contracts, with postmen and women earning 35% above the UK’s National Living Wage in 2020-21.
Royal Mail does make use of agency labour and it has an internal agency called Angard which provides sorting office workers during busy periods. But all agency workers receive the National Living Wage, with the majority receiving above the Real Living Wage, and there are opportunities to be moved onto a permanent contract.
In 2018, a DPD employee named Don Lane died after cancelling meetings with a kidney expert due to fears that he would be fined £150 if he was sick and could not find cover. This led DPD to conduct a review into their employment terms and conditions.
Now DPD drivers have the option to be employed directly by DPD, be a self-employed franchisee or become a self-employed worker. It claims that “the self-employed worker contract is designed to give drivers earnings of £28,800 a year, based on working five days a week, along with 28 annual days' holiday, a pension and sick pay”. However, whether the new system is better is controversial.
At Yodel drivers have the option to be self-employed or employed directly by Yodel. Self-employed drivers pay their own fuel and insurance, and either own or lease their own vehicle. Payment is per parcel, and drivers get the option to decline deliveries.
Employees are paid a set salary on a monthly basis and are provided with a Yodel uniform and vehicle. They are required to work on a shift basis, with full or part-time shifts available, and around 100 parcels to be delivered per shift. Yodel aims to give shift patterns 12 weeks in advance.
According to an online job advert, UPS delivery drivers are directly employed by the company, not through an agency. The working week is a minimum of 40 hours, plus paid overtime as and when required. The hourly rate is £12.46 per hour increasing after 6 and 12 months respectively, with a company pension, holiday pay and 20 days paid holiday.
According to the official website, Just Eat couriers can earn up to £10.20 per hour with paid holiday. If couriers start working from their local hub, they will be provided with an insured pushbike, e-bike or moped. There is also a company bonus scheme, pension contributions and both part- and full-time contracts with flexible shifts.
According to an online job advert seen at the time of writing, FedEx couriers have a scheduled work week of 45 hours with an hourly pay rate of £12.07. No other information could be found.
DHL, Uber Eats, and Deliveroo
No information could be found on the employment terms and conditions of DHL, Uber Eats or Deliveroo delivery drivers.