‘Takeaway delivery service Deliveroo had a stinker of an IPO – the share price immediately dropped by around a third.’ – Moneyweek
‘But London’s biggest IPO since 2011 was an unmitigated disaster. The stock plunged when trading started on Wednesday, and the shares eventually closed 26% below their listing price, wiping almost £2 billion ($2.8 billion) off Deliveroo’s initial market capitalization. The stock lost another 1.9% on Thursday.’ – CNN Business
Deliveroo’s initial public offering on the London Stock Exchange last week was a dismal failure, with many people asking what went wrong.
Others may ask what went right?
The significant shortfall against expectations was put down to large investors not taking up the offer. A lot of this was seen to be on the back of what was going on behind the scenes in the delivery company. After all, it has never made a profit and has become embroiled in controversy over the pay of its delivery drivers. Some are reported to earn as little as £2 per hour.
The market may have been spooked by the recent court case in the Supreme Court in America against Uber. Whilst this only relates to that specific company, Deliveroo uses a similar model to contract delivery personnel.
According to the Independent, ’Judges ruled that Uber drivers were indeed workers, not contractors. As of today, Uber drivers have effectively been given a 15 per cent pay rise (12 per cent holiday accrual and 3 percent pension contributions) and will be guaranteed the national minimum wage for the time they have passengers in their cars.
Who knows if the large investors were suddenly overcome by a wave of conscience or simply decided that the risk was not worth the investment. Either way there seems to be a glimmer of light when it comes to the reversal of the recent creep in unethical working practices.
Businesses that are based upon sound ethical principles and who treat their people fairly should be considered critical factors when it comes to deciding whether they are worth investing in or not.
I, for one, will not be buying Deliveroo shares.
Thoughts from a Guerrilla Worker 