The food delivery platform has revealed a major change to how it pays staff in a ‘watershed moment’, paving the way to a gig economy shake up.
Food delivery platform Menulog will break away from rivals Uber Eats and Deliveroo by providing minimum wage and superannuation to its couriers.
The leading platforms have typically relied on an independent contract model synonymous with the gig economy but have come under fire for failing to pay industry minimum wages.
Menulog managing director Morten Belling told a senate inquiry on Monday the company would trial a new approach for its drivers and riders in Sydney’s CBD where it would directly employ staff.
He said “we owe it to our couriers” to improve their standards of living, which the company wants to lift through a new employee model in Australia.
“We know this process will take time,” Mr Belling said.
“We are a big company with a large global network across 23 countries, each with their own requirements.
“Due to the timing of the hearing today, we are sharing this update on these intended changes sooner than anticipated.
“However, we strongly believe it is the right approach for this market and we are committed to progressing with it.
“We believe this plan will help us better do the right thing by our couriers and meet our moral obligations as an Australian-born business and one of Australia’s largest food delivery platforms.”
Mr Belling said Menulog would consider improving insurance for riders and drivers, as well as leave and superannuation entitlements through its pilot employment program.
The Transport Workers Union (TWU) applauded the announcement as a “watershed moment for the gig economy”, saying the move would reclassify riders and guarantee them minimum hourly payments.
“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,” national secretary Michael Kaine said.
“The TWU has agreed to work with Menulog on this important trial, which will challenge the myth that flexibility and fairness are at odds.
“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.”
Socially-conscious consumers could punish delivery platforms who refuse to improve payment conditions for workers, the union warned.
It also urged the federal government to “level the playing field” and regulate the industry to protect companies adopting better conditions for staff.
“Menulog must be encouraged to continue along this trajectory rather than (be) put at a competitive disadvantage,” Mr Kaine said.