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Holy crap, is this ethical investing? Or are they foreseeing legal issues that make it a bad investment... > the way the company employs its riders is not soc

Holy crap, is this ethical investing? Or are they foreseeing legal issues that make it a bad investment... > the way the company employs its riders is not socially acceptable, and poses a risk to its future. Ah, it's the latter.

agent008t 6y ago
Ideally, you want the former and the latter to be equivalent.
- VBprogrammer 6y ago
  An interesting take on this is that essentially we are seeing the results of strong unionisation in the taxi industry leading to cross polenation of protections in related industries (or at least investor fear that it may happen).
- londons_explore 6y ago
  The former and the latter can be made equivalent if unethical things can be made retrospectively illegal. It's bad for business to do so, but it's happening more and more frequently that things like not giving your workers sufficient breaks/pension contributions/healthcare/etc can after-the-fact be corrected leaving a big liability for that kind of behaviour. Obviously any country that gets a reputation for changing laws after-the-fact will soon lose all outside investment... So it isn't a clear win.
- notahacker 6y ago
  In this case, to an extent, they are. Deliveroo won one court case arguing its delivery drivers were contractors rather than employees being paid less than minimum wage, but after Uber lost in a higher court, the future of its business model depends on whether the ability to reject orders is perceived as sufficient freedom to negotiate independent contractor rates.
Milner08 6y ago
Yes, I'd say considering Uber in the UK has been force to start paying minimum wage and giving paid holidays to its drivers I imagine they think the same is very likely for Deliveroo.
- varispeed 6y ago
  If drivers get hired on inside IR35 contracts, they won't have to be paid minimum wage whilst being treated just like regular employees. They legally won't have any employment rights. The changes in law come to force in April.
Mauricebranagh 6y ago
I suspect the potential legal issues might be the real reason.
Closi 6y ago
Call me sceptical, but these same companies that say one asset is 'unethical' will invest in another that relies on slave labour in another market as soon as they see a buck to be made. They probably forecast legal issues that make it a bad investment, and then will say it's not socially acceptable for the PR. I mean, I doubt that Deliveroo labour standards are actually worse, for example, than a cambodian clothing manufacturer which was scored as one of the worst in the world for a lack of "forced labour safeguards". Aberdeen Standard (one of the companies criticising deliverro) proudly states on their website that their investments in this manufacturer gave great returns for their innvestors, while poo-pooing Deliveroo for labour standards. Hmm, I detect a possible contradiction...
- KptMarchewa 6y ago
  > Call me sceptical, but these same companies that say one asset is 'unethical' will invest in another that relies on slave labour in another market as soon as they see a buck to be made. In their eyes, slave labor is unethical in western countries and business as usual in rest of the world.
  - TeMPOraL 6y ago
    I think it's the same for them in both cases, just in western countries there are laws they could run afoul of, and possible PR damage to manage.
vesinisa 6y ago
I am not buying it. Food delivery is a simple menial job akin to cleaning. It will always be done by the lowest bidder. Regulation may affect the minimum driver compensation positively in the short term, but not too much before these delivery companies themselves become infeasible. However, the food delivery companies have already managed to bootstrap such massive market demand for the service they offer that it's not anymore realistic the industry would be regulated to death at this point. In the long term, the driver compensation will also go up - either as a result of either regulation or – more likely – driver collective action. Meanwhile, these investment funds are missing out on the birth of new basic service industry, and by extension guilty of mismanaging their customers' funds.

agent008t 6y ago

Ideally, you want the former and the latter to be equivalent.

VBprogrammer 6y ago
An interesting take on this is that essentially we are seeing the results of strong unionisation in the taxi industry leading to cross polenation of protections in related industries (or at least investor fear that it may happen).
londons_explore 6y ago
The former and the latter can be made equivalent if unethical things can be made retrospectively illegal. It's bad for business to do so, but it's happening more and more frequently that things like not giving your workers sufficient breaks/pension contributions/healthcare/etc can after-the-fact be corrected leaving a big liability for that kind of behaviour. Obviously any country that gets a reputation for changing laws after-the-fact will soon lose all outside investment... So it isn't a clear win.
notahacker 6y ago
In this case, to an extent, they are. Deliveroo won one court case arguing its delivery drivers were contractors rather than employees being paid less than minimum wage, but after Uber lost in a higher court, the future of its business model depends on whether the ability to reject orders is perceived as sufficient freedom to negotiate independent contractor rates.

Milner08 6y ago

Yes, I'd say considering Uber in the UK has been force to start paying minimum wage and giving paid holidays to its drivers I imagine they think the same is very likely for Deliveroo.

varispeed 6y ago
If drivers get hired on inside IR35 contracts, they won't have to be paid minimum wage whilst being treated just like regular employees. They legally won't have any employment rights. The changes in law come to force in April.

Mauricebranagh 6y ago

I suspect the potential legal issues might be the real reason.

Closi 6y ago

Call me sceptical, but these same companies that say one asset is 'unethical' will invest in another that relies on slave labour in another market as soon as they see a buck to be made. They probably forecast legal issues that make it a bad investment, and then will say it's not socially acceptable for the PR. I mean, I doubt that Deliveroo labour standards are actually worse, for example, than a cambodian clothing manufacturer which was scored as one of the worst in the world for a lack of "forced labour safeguards". Aberdeen Standard (one of the companies criticising deliverro) proudly states on their website that their investments in this manufacturer gave great returns for their innvestors, while poo-pooing Deliveroo for labour standards. Hmm, I detect a possible contradiction...

KptMarchewa 6y ago
> Call me sceptical, but these same companies that say one asset is 'unethical' will invest in another that relies on slave labour in another market as soon as they see a buck to be made. In their eyes, slave labor is unethical in western countries and business as usual in rest of the world.
- TeMPOraL 6y ago
  I think it's the same for them in both cases, just in western countries there are laws they could run afoul of, and possible PR damage to manage.

vesinisa 6y ago

I am not buying it. Food delivery is a simple menial job akin to cleaning. It will always be done by the lowest bidder. Regulation may affect the minimum driver compensation positively in the short term, but not too much before these delivery companies themselves become infeasible. However, the food delivery companies have already managed to bootstrap such massive market demand for the service they offer that it's not anymore realistic the industry would be regulated to death at this point. In the long term, the driver compensation will also go up - either as a result of either regulation or – more likely – driver collective action. Meanwhile, these investment funds are missing out on the birth of new basic service industry, and by extension guilty of mismanaging their customers' funds.