Deliveroo shares jump as trading opens to retail investors, while hundreds of riders begin protests in the UK over low pay and working conditions

Deliveroo rider
Goldman Sachs bought $103 million in Deliveroo shares to boost its stock after a disappointing IPO.

  • Deliveroo shares rose Wednesday as the company opened trading to retail investors.
  • On the same day, about 400 riders are staging protests in the UK as they call for higher pay and benefits.
  • Goldman Sachs bought $103 million in Deliveroo shares to boost its stock after a disappointing IPO.
  • See more stories on Insider’s business page.

Deliveroo shares rose 4% on Wednesday as the company opened trading to retail investors, a week after going public on the London Stock Exchange to institutional participants only.

The food-delivery group’s shares opened at 288 pence ($3.96), giving it a market value of £5.2 billion ($7.2 billion). That is down from the £7.6 billion ($10.5 billion) valuation its IPO was priced.

Further turbulence is expected for Deliveroo’s shares as about 70,000 retail investors begin trading their stock.

Separately, some 400 Deliveroo riders are staging socially-distanced strikes on the same day that it opened up trading to amateur investors.

Protests over what they describe as poor working conditions and low pay will take place in London and four other cities in the UK, according to a statement by the trade union Independent Workers’ Union of Great Britain.

The riders are revolting less than two weeks after The Bureau of Investigative Journalism revealed that some riders earn as little as £2 ($2.76) per hour for delivering food to customers, far below the minimum wage.

“I’m going on strike for my basic rights and those of all the other riders struggling to get by and support families on Deliveroo poverty pay,” Greg Howard, a Deliveroo rider and chair of the union’s couriers and logistics branch, said in a statement.

Howard said he has seen work conditions at Deliveroo decline for years. After working through the lockdown, he said he became infected with the coronavirus and got “very little support” from the company. On its site, Deliveroo says it offers a relief fund for infected riders.

Another rider, Ethan Bradley, told the Big Issue: “I don’t know if I’m going to be able to make the rent next week, or pay the bills. Many riders have family, have dependents and have kids to feed,” adding that security of earnings “would mean so much to them.”

A Deliveroo spokesperson told Insider that the “small self-appointed” union does not represent a majority of riders who tell the company they value its flexibility and an ability to earn over £13 ($17.9) an hour.

“We are proud that rider satisfaction is at an all-time high and that thousands of people are applying to be Deliveroo riders each and every week. Riders are at the heart of our business and today we are beginning a new consultation with riders about how we should invest our new £50 million community fund,” the spokesperson said in a statement.

Shares in Deliveroo tumbled by more than 30% at its stock market debut on March 31, when only institutions were allowed to participate. The Financial Times said its IPO has been dubbed “the worst in the history of the London market.”

The food-delivery group may have waited too long to capitalize on the IPO frenzy for COVID-19 stock winners.

Goldman Sachs, one of Deliveroo’s underwriters, bought shares worth £75 million ($103 million) to boost its stock after its IPO dwindled, the FT reported on Tuesday.

The result of Deliveroo’s IPO was deflating for many investors in UK tech, according to Christian Nentwich, founder of financial tech firm Duco. He told Insider that although there are lots of good arguments about whether the IPO’s pricing was rightly set over workers’ rights and future business risk, “frankly, no one cares in other companies, outcomes matter.”

“Protests about dual-control structure, about the strategy of burning cash to fuel growth, and so on, are irrelevant – companies can simply list elsewhere,” he said.

But brands are as strong as their weakest link and for Deliveroo, problematic worker practices are its biggest challenge, said Sophie Lord, executive director of strategy at brand consultant firm Landor & Fitch.

“Major investment houses are looking at ESG seriously and have made it clear, they won’t tolerate a failure to engage. Whether the brand now has the lifeforce to overcome the scrutiny, time will tell – as will its share price,” she said.

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Amazon is hiring 5,000 new employees in Germany, with some roles paying up to $82,000 per year

This picture shows the logo of US online retail giant Amazon at the distribution center in Moenchengladbach, western Germany, on December 17, 2019.
The company recently expanded its logistics empire to cope with rising demand over the holiday season.

  • Amazon will hire 5,000 more permanent employees in Germany in areas from shipping to marketing.
  • In a press release, the company said it encouraged applications from those seeking job security.
  • Entry-level Amazon logistics wages range from $13.25 to $14.90 per hour but are location-dependent.
  • See more stories on Insider’s business page.

Amazon already has 23,000 employees in Germany but is now looking to add more people to its workforce.

The delivery giant said in a press release on Friday that it would hire another 5,000 staff in areas from shipping to marketing.

Most Amazon employees work in logistics, where entry-level wages range from $13.25 to $14.90 gross per hour depending on the location. Germany’s current minimum wage is $11.14 per hour but will rise to $12.26 by July 2022.

At its logistics center in Sülzetal near Magdeburg, the minimum is $13.92 per hour; in Koblenz, it is $14.19; at the air freight handling facility in Leipzig it’s $15.83. Wages automatically rise after 12 and 24 months.

After two years, employees earned an average of around $3,500 gross per month including restricted employee shares, according to Amazon. There were bonus payments and other benefits.

It hasn’t been an easy year for the German branch of Amazon, with workers striking in June over rising COVID-19 infections at the company and again in October after their COVID-19 bonus payments were scrapped.

German trade union Verdi called for a four-day strike at Easter to demand a pay rise for workers in the retail and mail-order sectors. Amazon has also been subjected to an antitrust investigation over relationships with its third-party sellers in Germany.

In its press release, Amazon said it was calling for applications from those worried about the future of their jobs and was recruiting from a wide range of sectors.

Amazon Logistics Center
Amazon has 15 logistics centers spread across Germany.

“This is a great opportunity for career changers because we are open to a wide range of talents and qualifications,” said Amazon Germany country manager Ralf Kleber.

The company’s German headquarters are located in Munch while its research and development center is in Berlin. There are also a total of 15 logistics centers spread across the country.

Amazon itself does not provide any information about the salaries offered to employees in other sectors. According to employer rating portal Kununu, customer service employees earn about the same as their colleagues in warehouse and shipping.

Kununu’s data showed an account manager at Amazon earned almost $67,000 per year while a marketing officer earned around $62,000 and a human resources officer around $60,000.

According to Glassdoor, software engineers earn significantly more with a salary of over $82,000.

The company recently expanded its logistics empire to cope with rising demand over the holiday season and its delivery service could be worth up to $230 billion by 2025, according to Bank of America estimates.

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