Gig economy battle hits Deliveroo shares
ShareS in takeaway firms Deliveroo and Just Eat fell amid fears of a crackdown on the gig economy in europe.
Deliveroo sank to a record low of 220p before closing down 3.1pc, or 7.5p, to 234p while Just eat fell 4.9pc, or 214p, to 4146.5p.
The sell-off came as speculation swirled that the european Commission (eC) will propose stricter rules requiring companies to directly employ delivery drivers and riders.
Many takeaway firms class delivery staff as independent contractors rather than employees, meaning they are not required to provide certain benefits such as paid sick leave and workplace pensions.
however, if the eC orders that these workers must be classed as full employees it could jeopardise the firm’s business models by sharply increasing costs and potentially leading to higher prices for customers.
The employment status of delivery drivers has been a thorny issue for some time, with hundreds of Deliveroo riders walking out on strike in several UK cities earlier this year in protest over pay and working conditions.
The latest share price tumble also means the company’s shares are now around 43pc below their 390p listing price when it made its market debut in april.
The post-float decline has been a painful one for Deliveroo’s biggest shareholder, ecommerce giant amazon, which has seen around £336m wiped off the value of its 12.4pc stake in the group.
Shares in takeaway and other delivery firms have also come under pressure amid hopes the Omicron variant of Covid-19 will not be as bad as initially feared, reducing the chances of another lockdown and, by extension, the need for food to be delivered to people’s homes. This wider shift hit online grocer Ocado. Its shares fell 2.7pc, or 44.5p, to 1582p.
City financier Crispin Odey’s hedge fund, Odey asset Management, took a nearly 6pc stake in AO World, it disclosed yesterday.
Investors are looking to buy up recovery stocks that have tanked recently but stand to regain some value in the coming months.
Shares in aO World – which has fallen so much it will soon leave the FTSe 250 – rose 3.6pc, or 3.35p, to 96.95p.
The FTSE 100 was up 1.5pc, or 109.96 points, at 7232.28 while the FTSE 250 climbed 1pc, or 235.25 points, to 22881.33.
Fading fears of Omicron lifted travel stocks, with British airwaysowner IAG rising 8.1pc, or 10.64p, at 142.34p while holiday Inn operator Intercontinental Hotels added 3.5pc, or 157p, to 4701p.
Oil prices also rebounded with Brent crude rising back above $71 a barrel. The increase helped push Shell shares up 1.9pc, or 31.8p, to 1678.4p while BP bobbed up 1.7pc, or 5.65p, to 346.5p.
hopes that Omicron will not scupper the Christmas shopping season helped shares in high Street retailer and Primark-owner AB Foods, which rose 2.1pc, or 40p, to 1970p.
Mid-cap shipping firm Clarkson floated up 4.8pc, or 175p, to 3860pp after hiking its full-year forecasts following ‘continued strong trading’ in its second half. The group now expects its results for 2021 to be ‘ahead of current market expectations’ with profits of at least £65m.
South african coal miner Thungela Resources surged 15.8pc, or 52.5p, to 385.9p amid rising demand as the global economy continued to rebound from the Covid pandemic.