Uber Eats

US delivery service comes to Berlin

Uber Eats comes to Berlin
IMAGO / Hans Lucas
Uber Eats comes to Berlin

For a long time, the Just Eat Takeaway.com subsidiary Lieferando had the quasi-monopoly on the German delivery market. In August 2020, a competitor started in Berlin with the Finnish Wolt, and now another one is coming to the capital. The US delivery service Uber Eats is coming to Germany. This was announced by the company.

Pierre-Dimitri Gore-Coty, senior vice-president delivery at Uber, announced this to the Financial Times. It is expected to launch in the German capital in a few weeks. For Uber Eats, it will be a special challenge and a big test: In Germany, the company wants to work with permanently employed couriers, while in the US, for example, it relies on the so-called gig economy, i.e. paying couriers per ride.

Couriers hired via subcontractors

Under the plans, Uber Eats' couriers in Germany will be employed by special fleet management companies. Uber will then pay its German partners for each job. These are free to decide how they pay their employees. A similar model has already been introduced at Uber Eats in Geneva

following a court case last September. Germany would be a far greater test of its viability. Uber also has a similar model for its ride service active in some German cities: dedicated minicab companies employ the drivers, and Uber pays for the minicab services. Gore-Coty said working with a fleet manager "typically adds costs" and can make it harder to expand beyond larger cities. But on the other hand, he said, "you can create some efficiencies" in things like employee management.

Gig economy must rethink in Europe

Gig economy companies, such as Uber (Eats) or Deliveroo, like to argue for their form of payment on the basis of flexibility for contractors, such as drivers. However, in several European countries this form of payment collides with applicable labour law, as shown by various court rulings and political decisions.

In February, for example, the U.K. Supreme Court ruled that Uber drivers are classified as employees, not independent contractors. Prosecutors in Milan have threatened online delivery services with fines of hundreds of millions of euros after a year-long investigation into labor practices. The government in Spain also wants to classify courier drivers as workers. At Uber Eats competitor Lieferando, drivers are permanent employees.