Cost of Uber Eats could skyrocket due to union pressure in Australia

As pressure mounts on food delivery services, there is a likelihood that our cheap ride might be coming to an end. Photo/YouTube.

The cost of food delivery could be about to skyrocket following a union push in Australia to raise the minimum wage of drivers.

The powerful Transport Workers Union (TWU) and the Australian Workers' Union (AWU) want to raise the minimum hourly wage for delivery drivers to AU$24 (NZ$26) per hour, and both unions plan on taking the campaign to the Labor Party's national conference in July.

If the campaign is successful, popular food delivery apps like Uber Eats, Deliveroo and Foodora would also have to provide drivers with conditions such as superannuation and a minimum amount of hours per shift.

It would essentially recognise delivery drivers as employees rather than contractors and would move the terms of their employment on to a much more formal arrangement.

The shake-up of gig economy services would force companies to pay their teams of drivers hundreds of dollars more each week — an added cost expected to then trickle down to food delivery customers.

There have also been similar concerns regarding Uber in New Zealand.

Last year, The Listener reported that two local drivers were taking legal action against the company due to what they alleged were unfair policies.

There was also strong criticism from drivers in 2016 when fares were dropped by 27 percent.

Many local drivers told media that they could no longer afford to drive for the service, given that they were essentially making well below minimum wage.

"I started to feel like a dick," former Uber driver Arden MacDonald told The Listener.

"I would pull up and people would get in and go, 'Ha, this is cheaper than wearing out my shoes.' I thought, 'I'm not doing this – this is ridiculous.'"

Many other drivers have since called for greater protection and a more formal employment relationship, and these calls will only become louder as the gig-economy plays a bigger role in the delivery space.

An Uber spokesman told the Daily Telegraph the changes would destroy the company's flexible work arrangements, which is why 94 per cent of drivers signed up to work for Uber in the first place.

"There is demand for more flexible, independent forms of work and digital technologies are opening up reliable, diverse and unprecedented opportunities for ­income generation — often for those who need it most," he said.

TWU boss Tony Sheldon said food delivery companies were operating "in a similar way as the early days of industrialisation in the 1800s".

"The difference now is that change is coming via apps and by billionaires influential in the political system," he told the Daily Telegraph.

"It means workers ... are struggling to pay their bills and have no prospect for dignity in retirement because there is no superannuation being paid."

According to a TWU survey, three in four drivers in Sydney and Melbourne reported being paid below the minimum wage, with many having been injured while on the job.

Many delivery drivers also reported a lack of insurance cover and sick pay and 40-hour-plus working weeks, Fairfax reports.

The Australian campaign follows a recent British court decision which found Uber drivers should be classified as workers with minimum wage entitlements and holiday pay.

Rideshare Drivers United, which advocates for Australia's 60,000 Uber drivers, has estimated full-time drivers earn around $18.75 an hour, the Telegraph reported.

Deliveroo has a team of more than 3600 self-employed riders across Australia.

- News.com.au