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Deliveroo accounts for 2019 have been leaked. [A Thread...] Hedline is that as we already know, success isn't about being profitable, it's about achieving a high share price/corporate valuation. Lets look at the highest paid director as for why...
![Deliveroo accounts for 2019 have been leaked. [A Thread...] Hedline is that as we already know, success isn't about being profitable, it's about achieving a high share price/corporate valuation. Lets look at the highest paid director as for why...](https://pbs.twimg.com/media/Ep2DzFBW4AIxrun.png "Deliveroo accounts for 2019 have been leaked. [A Thread...] Hedline is that as we already know, success isn't about being profitable, it's about achieving a high share price/corporate valuation. Lets look at the highest paid director as for why...")
what that chart says, is that their salary only represents 2.9% of their total remunaration. 0.1% has been put into post-reitrement benefits, leaving a whoipping 97% as bound-up in shares
What's critical, is that this share price can change, and is also not at all related to the profitability at present. If the value of Deliveroo increases, so to does the price of every share, and with it, that £8,275,888 that is currently sat in their pocket.
We've already seen this play out with Uber, who having IPO'd provided the opportunity for their early investors and founders to cash out $BILLIONS as other new shareholders bought in, onbly for their main route to profitability (autonomous vehicles) to be sold off
The upshot of this, is that decsision makers in platform companies (I.e. founders, C-class employees, etc.) aren't rewarded for how profitable the company is today. They are rewarded by how much the company valuation increases.
This is why it's no coincidence that RooFoods gave all of their white-collar employees £5k in shares. It means that if the company valuation increases, so too does their holdings. This isn't new in market capitalism though, so what is..?
Well, if we look at the rest of the accounts of Deliveroo and others, they're making significant losses, with nothing noticeable in the pipeline to deliver future profits. In the past, the market would devalue these firms and they'd wither and die. Now though, we've got a bubble
Just like in the .com burst, profits are seen as irrelevant against the hype. All they need to do is show a slow progression toward profitability. But how can you do that when you're already under-cutting the competition?
The simple answer is to cut labour costs. The income tax payments for Roo are remasrkably low for their size (£386,374) made possible by tax credits and using an army of self employed drivers to deliver food who have to pay their own taxes.
The next way to cut costs, when you've already outsourced labour, is just to reduce labour cost. That's why riders have seen their pay decreasing week on week, it's why riders have been evicted from their houses, and it's ultimately why riders have been killed taking on...
riskier and riskier work situations when tired - trying to earn enough to make ends meet. We are literally dying out here to make the company look more profitable, so Will Shu and his director & investor chums can cash out their investments at IPO for masses of cash
And the repayment for contributing to Will Shu's massive windfall? ~£3 a job to move food throuygh busy traffic in the middle of a pandemic. Disgraceful.
in sum? The gig economy is a giant ponzy scheme to lure in new investors at IPO, take their money and make for the Camen Islands. The workers who risk their lives for less than minimum wage are an expendable part of this plan.
