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Most noticed business news stories in July

Reputation has a lot to do with having values and living by them. We may buy from companies that express values we agree with and in extreme cases boycott those that do not. Businesses can express values through a particular sourcing policy, support for a CSR programme, or treatment of customers and staff. This month we look at two companies that, in the eyes of their critics, have failed to take sufficient notice of values commonly held by the public.

Deliveroo and the ‘gig economy’ is getting a bit Orwellian

The current state of the ‘gig economy’ has raised questions about the treatment of riders at the delivery company Deliveroo. Riders currently do not receive employer contributions to pensions, holiday pay and the company avoids paying employer’s national insurance as riders are classified as ‘independent suppliers’ rather than ‘workers’.

Deliveroo contends that riders have bargained these rights for greater flexibility in their work. But critics have pointed out the company makes riders buy and wear a uniform, agree to shifts in advance and accept rates set by Deliveroo – traits more commonly associated with workers rather than independent suppliers. The company is currently involved in a tribunal that could change the status of its riders and also faces substantial regulatory risk from the Taylor review of modern employment practices. Deliveroo must tread carefully or risk provoking change in the current regulatory regime it operates within.

In a somewhat unconventional move, in order to support the sense that riders are ‘independent suppliers’ rather than ‘workers’ Deliveroo distributed a set of ‘dos’ and ‘don’ts’ when it comes to referring to riders. Riders do not do ‘shifts’ but instead have ‘availability’, do not wear ‘uniform’ but have ‘kit’ or ‘equipment’ and – most indicatively of the shift from late 20th century trade unionised work to the early 21st century ‘gig economy’ – do not ‘clock on’, but ‘log in’.

This generated further criticism and after coming up against as much indignation as The Guardian could muster, and in the face of the publication of the Taylor review of modern employment practices, Deliveroo put out a statement to address the issue of riders’ rights.  The company tried to meet critics half way saying it would grant riders some rights, given that the government changed the law, but would not give them full rights as the law currently recognised them as ‘independent contractors’.

In the end, the Taylor review effectively concurred, arguing the government should extend some rights to those in the ‘gig economy’, but not all. The review disappointed trade unions and some in the Labour party who saw it as a ‘missed opportunity’. But the review is not the last word as MPs have invited senior executives at Deliveroo to appear in front of the BEIS select committee. Here, we can expect politicians to riff on the moral obligations businesses have to their employees and society at the expense of Deliveroo.

So far the company has stuck firmly to its contention that riders are ‘independent contractors’ rather than ‘workers’ and refused to grant them full rights. But either way it loses. If their employees are deemed ‘workers’ it can expect huge pay-outs to riders, if their employees are found to be ‘independent contractors’, it will continue to build its reputation as a company that does not meet its moral obligations and invite regulatory risk. Whatever happens, Deliveroo needs to show that its relationship with its employees goes beyond what is legally obligated and demonstrate some form of additional benefit the company generates for its riders.

Boots should not moralise where it stands to gain

After a campaign by the British Pregnancy Advisory Service that saw competitors Tesco and Superdrug halve the price of their morning after pill, Boots decided to hold firm. It is likely that this alone would have been difficult to explain, but not wounding to its reputation. What caught the attention of many was the statement released by Chief Pharmacist of Boots who said that the company would not drop the price because they ‘would not want to be accused of incentivising inappropriate use, and provoking complaints’.

This statement was criticised for moralising at the expense of women’s ability to access a necessary product. Many also pointed out that Boots stood to gain from keeping prices high.

Soon there were calls to boycott Boots and the Women’s Parliamentary Labour Party wrote to the chemist expressing their concerns. Finally, in a move criticised by the Christian Medical Fellowship as giving in to a ‘cartel of radical feminist MPs’ Boots capitulated, apologising for their choice of language and committing to reduce the price.

In the end, Boots were right – they did receive criticism – and because of how they handled the situation it came from both sides of the debate.

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