Shares of food delivery startup Deliveroo (LON: ROO) have plunged on its stock market debut on Wednesday as criticism grows over workers rights.
The company, which is backed by Amazon, priced its shares at 390p, valuing the company at £7.59 billion, the bottom of its IPO target range.
However, Deliveroo’s share price fell to lows of 271p shortly after the markets opened in London. They are currently trading at 292p per share.
Deliveroo has been under pressure in recent weeks amid growing criticism of workers rights issues, with reports that investors had raised concerns.
Analysis conducted by the Bureau of Investigative Journalism of invoices found that more than half of the couriers were paid less than the £10 per hour average across the company, with one courier in Yorkshire paid the equivalent of £2 per hour over 180 hours.
There are no minimum pay rates for Deliveroo riders as they are classed as independent self-employed contractors.
The London based firm has £112 million set aside to cover any potential legal costs due to riders employment status.
After announcing its IPO price, the company’s Founder and CEO, Will Shu, said: “I want to thank everyone who has helped to build Deliveroo into the company it is today – in particular our restaurants and grocers, riders and customers.
“In this next phase of our journey as a public company we will continue to invest in the innovations that help restaurants and grocers to grow their businesses, to bring customers more choice than ever before, and to provide riders with more work.”
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