The Deliveroo IPO boycott could be far reaching, and have implications far beyond the tech industry as fund managers slate their ethical stances. As experts in reputation shaping for tech-driven business, Firefly and I are watching closely.
A growing number of institutional investors* have boycotted the IPO, citing the Deliveroo employment practices as a ticking timebomb which makes the company uninvestible.
Certainly, with the recent Uber news of greater legal rights being given to its riders and drivers, there is an element of reputational and legal risk if Deliveroo does not change the business model, and an element of financial risk if it does, as Deliveroo’s profit margin is already very slim.
Interestingly, while Deliveroo may yet stumble on this issue of gig economy practices, its competitors such as Just Eat offers full employment contracts to all its UK-based riders.
Deliveroo offers a great service which I have enjoyed many times, and it has a highly motivated and award-winning in-house PR team. Hopefully the team has CEO, Will Shu’s ear on resolving or counteracting the reputational damage and criticism. There is no doubt it’s special, exciting and encouraging to see a British business list on the London Stock Exchange. We wish Deliveroo well. We also wish it looks after its workers more fairly.
We’ll see what gets served up when shares trade, we’ll share more views after that.