Last Mile Brief 23/03/2023: Just Eat to cut 1,900 jobs and move to ‘gig worker’ model in UK

The company cited a 9% slump in customer numbers last year as Covid rules eased and diners returned to pubs and restaurants. Just Eat also plans to retire the employment model in favour of the ‘gig worker’ structure, resulting in 1,700 job losses.

Most of the firm’s delivery drivers are contractors who do not enjoy perks such as a fixed hourly rate, uncapped bonuses, and other benefits such as sick pay. Riders in the EU are mostly classified as workers, but more than 90% of its meals in Britain are delivered by contractors.

A Just Eat spokesperson said:

“We have proposed to transition away from the worker model for couriers, which is a small part of our overall delivery operations – running in certain parts of six UK cities.”

The spokesperson also assured that the move would not affect services.

Just Eat had previously been a prominent supporter of plans to hire its couriers in Europe as workers, arguing that this gave them benefits and more workplace protection.

The move follows a similar announcement from Deliveroo, which plans to cut about 350 roles, mostly in the UK, due to “unforeseen economic headwinds.”

Just Eat’s ‘U-turn’ comes two years after the company sought to set itself apart from its largest rivals, Deliveroo and Uber Eats, by hiring couriers in the UK rather than relying entirely on gig workers for takeaway deliveries.

The decision comes as food delivery companies are under pressure from investors to improve profitability amid a slowdown in demand following the sector’s lockdown-driven boom.

Analysis by Bloq.it’s Tomás Borges de Castro: Potential for CO2 reduction with APMs

Last mile delivery is responsible for a significant amount of carbon dioxide (CO2) emissions in the transportation sector, accounting for up to 30% of total delivery costs and generating up to 25% of total CO2 emissions. However, Automated Parcel Machines (APMs) have emerged as a promising solution to reduce the environmental impact of last mile delivery.

Companies such as DHL Parcel and UPS have reported significant reductions in CO2 emissions by adopting APMs for last mile delivery.

For example, DHL Parcel estimated that their use of APMs saved approximately 9,000 tons of CO2 emissions in 2020. Similarly, UPS reported that using APMs for last mile delivery saved up to 76% in CO2 emissions compared to traditional delivery methods.

APMs also promote circular economy practices by enabling customers to return and exchange products easily, reducing the amount of waste generated by the delivery process. The Ellen MacArthur Foundation estimated that using APMs for product returns can reduce the carbon footprint of the returns process by up to 80%.

Moreover, the implementation of APMs has been shown to reduce the number of delivery vehicles on the road, resulting in a significant decrease in carbon emissions.

The Vinted Climate Impact Report found that the use of APMs reduced the carbon footprint of their deliveries by 68% in 2020, resulting in a reduction of 11,000 tons of CO2 emissions.

In conclusion, the adoption of APMs offers a valuable solution for companies looking to reduce their environmental impact while meeting the demands of their customers.

Sources:

• European Commission. (2018). Study on the Environmental Impact of e-commerce and other online activities and the use of express delivery services. Retrieved from https://op.europa.eu/en/publication-detail/-/publication/b0634c3e-e5f5-11e8-8181-01aa75ed71a1/language-en/format-PDF/source-search
• UPS. (2017). Parcel delivery: The future of last mile. Retrieved from https://www.ups.com/media/news/en/Future_of_Last_Mile.pdf
• Climate Report Summary by Vinted: https://press-center-static.vinted.com/Climate_Impact_Report_Summary_EN_cd0ad9bedf.pdf