LONDON: Deliveroo on Monday trimmed the anticipated value of its London flotation, citing market volatility, but stayed on track for the City’s biggest listing in 10 years thanks to pandemic lockdowns boosting sales.
As criticism mounts over the app-driven meals delivery firm’s treatment of its riders, Deliveroo said the initial public offering Wednesday is now eyed at between £7.6 billion and £7.85 billion ($10.5 billion-$10.8 billion, 8.9 billion euros-9.2 billion euros).
The eight-year old British company last week gave an IPO market capitalisation of up to £8.8 billion.
Deliveroo’s listing is seen as a major boost to London’s financial sector, known as the City, which lost its European share trading crown to Amsterdam following Brexit.
“Given volatile global market conditions for IPOs, Deliveroo is choosing to price responsibly,” a company spokesman said Monday, noting it had however received “very significant demand”.
“As Deliveroo gears up for its flotation on the London stock market, the company is facing a backlash over its business model from some potential investors,” said Professor Chris Warhurst, head of the Institute for Employment Research at the University of Warwick.
“Investors’ perceptions of the company seem to be influenced by whether, in the future, there might be consumer boycotts of the company or that profits might evaporate under compensation claims from workers.”
British asset management firms Aviva Investors and Aberdeen Standard have decided against investing in Deliveroo’s IPO, citing the job insecurity of its riders.
Last year, more than six million people ordered food and drink every month via the company’s app from 115,000 cafes, restaurants and stores.
However, its business model has come under scrutiny, including in Britain, France and Spain, as its freelance delivery riders complain about working conditions.
The float has been overshadowed by protests, strikes and rallies in Australia, Britain and France — with more set to follow.
Pressure has intensified on the wider “gig” economy to improve staff conditions after Uber earlier this month granted its UK drivers worker status, with benefits including a minimum wage.
A world first for the US ride-hailing giant, Uber moved after Britain’s Supreme Court ruled that its drivers were entitled to worker’s rights. Amazon-backed Deliveroo maintains that its self-employed riders — which total around 100,000 across some 800 cities worldwide — value the flexibility the job affords, adding that on average its food couriers earn more than £10 per hour.
The Independent Workers’ Union of Great Britain, which has taken Deliveroo to court to win bargaining rights for its riders, claims that some couriers in the north of England are earning £2 per hour, well below the UK minimum wage.