Menulog will reclassify riders as employees rather than contractors as part of a new Sydney pilot, in what has been described as a “watershed moment”.
Under the pilot, Menulog workers will receive the minimum wage and have rights to annual and sick leave, superannuation and workers’ compensation.
“This is a watershed moment for the gig economy in Australia. For the first time, a food delivery company has realised the importance of awarding minimum pay and rights to riders and will move towards this model,” Transport Workers’ Union (TWU) national secretary Michael Kaine said.
He said the trial will “challenge the myth” that it’s impossible to pay gig economy workers minimum pay.
“Minimum pay and rights for riders will break apart the dependent, exploitative relationship that forces riders to work quickly and dangerously over long hours just to put food on the table,” he said.
Calls for Sydney-siders to ditch Uber Eats, use Menulog
The Australian Council of Trade Unions (ACTU) also welcomed the decision, adding that if Menulog moves beyond a trial, it will call on Australians to ditch other food delivery apps.
“People will be able to benefit from the convenience without also buying exploitation,” ACTU secretary Sally McManus said.
Kaine said socially conscious consumers will now also have the opportunity to purchase from a company without placing workers at risk.
“It is vital for the Federal Government to level the playing field and regulate this industry to protect companies moving to provide essential rights and protections for workers. Menulog must be encouraged to continue along this trajectory rather than put at a competitive disadvantage,” he said.
$10.42 an hour warning
Analysis of food delivery drivers by Finder found that those who do it as a side hustle make an average $423 a month.
And TWU research released last year found that the average food delivery driver made $10.42 an hour - or around half the size of the $24.80 an hour minimum wage.
While Menulog has moved to award minimum rates, Kaine told the federal select committee into job security on Monday that these conditions could bleed into the broader transport sector without Government regulation.
“This model now threatens to pervade the entirety of the freight market and has moved quickly into nearly every single area of the economy,” Kaine said.
“We are beyond disaster and disgrace. This is a national emergency.”
Uber Eats Australia also told the inquiry that it is open to paying minimum rates, but is concerned that that would come at the cost of flexibility.
“If we are talking about putting minimum rates, including wait times, we wouldn’t be supportive of that,” Uber Eats general manager Matthew Denman said.
“In order to do that it would require us to require all drivers and delivery partners to only use our platform and worked fixed shifts in fixed places.
“We’re not supportive of the traditional employment model.”