Deliveroo spends £10m on driver insurance but stops short of extra benefits
Deliveroo is spending £10 million to equip 35,000 riders with free accident insurance, but said further benefits risk classifying self-employed workers as staff.
Riders in 12 countries will be automatically enrolled in an insurance package that will cover them for up to £7,500 of medical expenses as well as up to 75% of average gross income if they are injured while working - at no cost to themselves.
It is being touted as an improvement on the "exclusive" accident and personal sickness and injury cover made available to its UK food delivery riders in December for £1.85 per week, and is expected to cost the company nearly £10 million at the outset.
Deliveroo said it would like to offer more benefits to drivers but risks being forced to count riders as staff rather than as self-employed workers.
Chief executive and founder Will Shu said: "We know riders value the flexibility of being able to fit their work around their life, but they also deserve security if they're involved in an accident."
He added: "We would like to go further, but are currently constrained by the law.
"Deliveroo will continue arguing for the law to be updated so on-demand companies can offer both flexibility and security."
But union representatives said the company needs to go further.
Mick Rix, a national officer for the GMB union, said: "Deliveroo finally appears to be taking the safety of its workers seriously.
"But the company, along with other gig economy employers, must wake up to its other responsibilities and pay the national living wage for all time worked along with holiday and sick pay."
Late last year the delivery firm claimed a victory for its riders, who Deliveroo said wanted the flexibility of being self-employed rather than being classed as "workers", marking a notable case regarding employment rights in the so-called gig economy.
It came after a Central Arbitration Committee (CAC) rejected an application by the Independent Workers' Union of Great Britain (IWUGB) to represent drivers in parts of north London.
Reacting to the new insurance offer, Megab Brown, of the IWUGB ,said : "It is a laughably bad joke that Deliveroo denies its riders worker rights while pretending to be on their side.
"There is nothing in the law that prevents Deliveroo from offering its riders both a flexible working arrangement and worker rights, including guaranteed minimum wage and holiday pay.
"The idea that this is impossible is a myth that serves only Deliveroo and other unscrupulous companies wishing to flout their responsibilities."
The new insurance package will apply to all of its riders while they are logged in and marked as available on the Deliveroo app as well as up up to one hour after logging off.
Its cyclists will also have access to £1 million in public liability insurance and will cover scooter drivers while they are off their vehicle.
Initially, the free cover will be introduced in the UK, Ireland, Italy, Spain, Belgium, Netherlands, Singapore and Hong Kong, Australia, the UAE and will continue in France. Germany is expected to follow.
The accident insurance and third party liability will come into force in May.