Menulog announces pivot towards ‘employment model’ for all couriers within coming years

Menulog says it is moving away from the controversial independent contractor model favoured by its gig economy rivals and wants to have all its couriers employed by the company within a “few years’ time”.

In a move designed to differentiate itself from rivals such as Uber Eats and Deliveroo, Menulog’s managing director, Morten Belling, said on Monday the company would move towards an “employment model” beginning with a trial among its Sydney couriers.

At the same time, the company will also look at its existing contracts with its current pool of couriers and examine ways to “bridge the gap”, compared to those working under an employee model, Belling told a Senate select committee inquiry on Monday.

This would include increasing current insurance cover and examining portable leave entitlements and superannuation.

Menulog said it would also work with the Fair Work Commission and consult with the Transport Workers Union with a view to creating a new modern award because it does not believe the current casual awards are suitable.

Belling said moving to an hourly rate of pay would “eliminate the need for couriers to be multi-apping to the extent we see today” – meaning he expected employees would be barred from working for other platforms.

“While we have been compliant for many years running this business, and we still are, we think we’ve got a moral obligation to do more,” Belling said.Advertisement

The managing director said he hoped “in a few years’ time” all workers using Menulog would be employed by the company.

Food delivery apps have spiked in popularity during the pandemic, with many visa holders relying on them for an income after they were excluded from the jobkeeper program and were unable to work in traditional industries such as travel and hospitality.

But the apps have also faced significant scrutiny in recent months following a spate of delivery rider deaths on the roads.

Belling said in part the decision to move to an employment model was driven by safety concerns.

The Menulog announcement came after rivals Uber Eats and Deliveroo baulked at calls for a minimum rate of pay for people who use its platforms when they fronted the inquiry.

Both said they would support moves to provide so-called portable benefits, such as sick leave and personal leave, but emphasised that drivers and riders must keep their status as independent contractors. Such benefits are usually provided by pooling contributions from independent contractors.

Deliveroo and Uber say they oppose minimum pay rates in part because it would require riders and drivers to work fixed shifts – a claim unions have disputed.

Asked by Labor senator Tony Sheldon what would stop a company merely taking new sick leave benefits out of a person’s existing pay without an enforced minimum rate, Deliveroo’s chief executive, Ed McManus, said: “One would need to work that out.”

But he acknowledged its riders wanted sick leave and said it was “something we want to do”.

Uber said it was open to a broad discussion about “earnings”, but emphasised this should be confined to the period when a person had accepted a trip to when it was completed, or what it calls “engaged time”. It should not include the time when drivers were waiting for a job.

Uber also backed portability benefits but did not have a specific proposal in mind.

“We don’t think flexibility should come as a trade-off for protection,” Uber’s general manager, Dominic Taylor, said. “There are many options on the table.”

The move from Menulog is likely to pile more pressure on gig economy apps – which also include disability service matching platforms such as Mable – to address claims that its contractors end up earning less than the casual minimum wage.

The inquiry heard research commissioned by Uber found its drivers and delivery riders earned, on average, about $21 an hour.

Sheldon said other research had found the figure was lower, and he noted that casual minimum wage was $24.80 an hour anyway. “So you’re paying below the minimum wage,” he said.

Uber argues that the $21 an hour figure includes time between trips, meaning average earnings are actually higher.

Matthew Denman, Uber Eats’ general manager, said the company was “eager to see national standards around safety”, including a minimum insurance standard.

The inquiry heard earlier that ride-share company Ola suspended its insurance scheme in June for financial reasons.

Under questioning from the Labor senator Jess Walsh, Ann Tan, Ola’s head of legal, confirmed drivers who were injured on the job would therefore not receive any income support or medical expenses from the company.

“We do advise our drivers to make sure that they are fully covered in relation to their insurance and any entitlements that they would require to enable them to operate safely on the platform,” Tan said.

The inquiry heard more than a third of ride-share app workers have been involved in a car accident at work, according to a Transport Workers Union survey.

Asked about this, Tan said she did not know the proportion of Ola drivers that had been in an accident at work.

Asked by Sheldon why other companies such as Uber and Deliveroo could not follow Menulog’s lead, Belling said: “I believe they can.”

Although it was early in the process it was likely those employed to work for Menulog would be barred from working for other apps.

“The reason why this multi-apping can happen at the moment is because couriers are trying to optimise the hourly rates of pay,” he said.

Belling said Menulog’s parent company had already operated in this way in Europe for many years.

Another disability services company that fronted the inquiry, HireUp, also contracts its workers as employees, meaning they get award pay and entitlements and full insurance.

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