Deliveroo is to set up a £ 50m pandemic recovery fund as part of a charm attack linked to its $ 7bn stock market launch.
The food delivery service is also expected to set aside sections for Deliveroo customers and could prepare to donate cash or rewards to thousands of cyclists.
The industry is expected to publish details of its listing plans on Monday, days after it was announced that it chose London, where the company was founded, for the first time as a public company.
The timing of the decision appeared deliberately for the chancellor, Rishi Sunak, who had announced plans to release City listing rules a day earlier and apparently take part in credit for the news at Deliveroo.
Now the company plans to double the political and financial institution’s courtship with a series of offers designed to show its good intentions.
They include a £ 50m community fund, spread over five years, to support restaurants struggling with plans to reopen after a lock-in, pay for food vulnerable people and to buy some of its 50,000 riders in the UK to buy electric scooters.
The float is expected to be open to its customers, a rarity among major listings of recent years, while couriers could offer a financial reward as part of the deal.
The plan will deliver millions of pounds in consultancy fees to bankers and lawyers, as well as highlighting a £ 500m fortune for the company’s founder, Will Shu.
The British Independent Workers Union (IWGB), which recently won a legal battle against Uber over driver employment status, said the wealth generated by Flod Deliveroo would come at the expense of messengers.
The army of self-employed messengers, the union says, work too hard and sometimes earn so little that they rely on the support of universal credit.
Alex Marshall, president of the IWGB, said Deliveroo’s community fund was a “publicity stunt” to distract from a poor working environment. He said cyclists, some of whom are represented by the IWGB, have struggled with the epidemic and are effectively earning less than the minimum wage, working 70-hour weeks but trust in global credit enhancement.
“Deliveroo is as brutally cost-effective as possible, just to maximize profits for the people at the top, who will stand to make millions from this launch,” Marshall said.
Deliveroo rejects the claims and says most cyclists earn more than the national minimum wage, which will be £ 6.56 an hour for people aged 18-20 from April 1, rising to £ 8.91, the national living wage, for those over 23.
Deliveroo has said the law needed to be changed for it to provide more benefits to riders without losing the self-employed status that gives them flexibility.
The success of the industry and the potential behind the flotty go against a decision made by the competition watchdog last year that Deliveroo met the criteria for a “failing company”, due to the effects of the pandemic.
The CMA determined that it was in such danger of collapse that it sacked Amazon to take a 16% stake in the company as part of a £ 450m fundraiser.
Since the outbreak of the pandemic, Deliveroo has expanded by forming delivery partnerships with supermarkets such as Waitrose and Aldi.
Deliveroo’s floating plans were made easier when Sunak used the budget to announce plans to allow for “dual-class” sharing structures for high-end FTSE listings, reinforcing recommendations outlined in a study by Lord Hill. This will allow Shu to retain enhanced voting rights that will prevent it from being extracted. After three years, the company will return to a more equal share structure.
In the US, Facebook founder Mark Zuckerberg and co-founders of Google have used dual structures to hold on to their emperors.
Deliveroo is said to be seeking a $ 7bn price tag despite accumulating £ 875m in losses over the past four years, £ 318m of which in 2019 alone, while it is the pursuit of growth at the expense of employment.
Shu, who was born in the US, had an idea for Deliveroo while working as an investment banker for Morgan Stanley and began implementing it in 2013, with co-founder, friend and software engineer Greg Orlowski.
Shu was the company’s first rider and said in an interview in 2017 that he was still constantly moving to understand the experiences of drivers and customers.
The company has hired Lord Simon Wolfson, a Conservative peer and chief executive of the Next resale, to sit on its board.