Deliveroo, a British food delivery service, fell as much as 30 percent in its first-minute business on Wednesday. The company had set its initial public issue price at £ 3.90 per share, market value of £ 7.6 billion or 10.4 billion. But it traded for the first time at £ 3.31, 15 per cent lower, and kept falling.
It is a sad public debut for the company that was promoted as a post-Brexit victory for London’s financial markets. It has been offered by major investors to settle the IPO amid concerns about shareholder voting rights and the payment of the Deliveroo rider. Deliver is trading under the ticker “ROO”.
The business model of Deliveroo and other gig economy companies is growing as a threat in Europe as legal challenges mount. two weeks ago, Uber reclassified more than 70,000 drivers in the UK as workers Following the Supreme Court ruling, access to the minimum wage, holiday pay and pension scheme will be granted. Analysts said the move could set an example for other companies and increase costs.
To deliver, Which is based in London and was founded in 2013, now occupies 12 countries and has more than 100,000 riders, recognizable on the streets with their teal jackets and food bags. Last year, Amazon became its largest shareholder.
The demand for Deliveroo’s services may soon decrease, as well as epidemic restrictions in its largest market, the UK, are beginning to ease. In a few weeks, the restaurants will reopen for outdoor dining. Last year, Deliveroo said, it lost £ 226.4 million, while its revenue jumped more than 50 percent to nearly 1.2 billion.
Last week, A joint investigation It was published by the Independent Workers Union of Great Britain and the Bureau of Investigative Journalism on the basis of invoices of hundreds of Delivero riders. It found that one-third of the riders made less than £ 8.72 per hour, which was the national minimum wage for people over 25.
Deliveroo dismissed the report, calling the union a “fringe organization” that did not represent a significant number of Deliveroo riders. The company said riders were paid for each delivery and earned an average of “£ 13 per hour” in our busiest times. In the UK, Deliveroo has 50,000 riders.
On Monday, the shares traded hands in a period called an open conditional deal to allocate shares to investors in the initial offering. The stock is expected to be fully listed on the London Stock Exchange next Wednesday and has since been traded without restriction.