Deliveroo to hand riders up to £10,000 in UK float
Deliveroo will reward its busiest riders with bonuses of up to £10,000 when the food delivery firm lists its shares on the London Stock Exchange.
Riders who have delivered the most orders will share in a £16m fund, the company said. Deliveroo will also open the flotation to its customers who can buy up to £1,000 worth of shares in the firm. The company is expected to be valued at around $7bn (£5bn) when it floats but it is yet to make a profit. In its most recent financial results for the year to 31 December 2019, sales rose by 62% to £771.7m. However, pre-tax losses also grew from £243.3m to £317.7m. Demand for takeaway meals has soared during the coronavirus pandemic, after lockdown measures were first implemented a year ago and restaurants have been forced to close. "A year of various lockdowns has fuelled demand for companies like Deliveroo," said Russ Mould, investment director at AJ Bell. Restrictions on hospitality businesses will start to ease on 12 April. But Mr Mould said: "There is an expectation that habits formed during the pandemic will remain long into the recovery. Payments Deliveroo, which was founded in 2013, confirmed that it will list its shares in London. As part of the flotation, riders in its 12 markets who have worked with the firm for at least a year will be paid a bonus of either £10,000, £1,000, £500 and £200 depending on the number of orders they have delivered. Deliveroo also said it would make £50m worth of shares available to customers who would be able to register their interest via the company's app. It said that if demand for shares was high, Deliveroo would prioritise existing "loyal customers". But it added that it would "make sure a mixture of new and existing customers benefit". Deliveroo founder and chief executive Will Shu, said: "Far too often normal people are locked out of initial public offerings and the only participants are the institutional investors. "I wanted to give as many customers as possible the chance to become shareholders." Listing rules Deliveroo's decision to list in London was revealed as a government-commissioned review of the UK's listing rules recommended a number of measures to make the country a more attractive place for companies to float. The review, led by former European Commissioner Lord Hill, recommended allowing two different classes of shares with differential voting rights. It gives founders more power in making key decisions. Major tech companies such as Facebook and Google-owner Alphabet have so called dual-class shares. Deliveroo confirmed it intends to use the same structure when it floats on the London Stock Exchange.