Just Eat Takeaway.com NV (LSE:JET, NASDAQ:GRUB) move back to a gig economy model in the UK, treating delivery drivers as contractors rather than employees, should mean the move occurs in Europe quicker than expected, according to Jefferies.
Analysts at the bank said they previously believed it would take “several years” for the company to see the benefits of the gig economy model filter through in its European markets.
But after the dual-listed delivery service yesterday axed 1,700 UK drivers, the broker now expects this to occur across the continent sooner than anticipated.
Jefferies also believes the Platform Work Directive introduced by the European Union will “neutralise” Just Eat’s status as an employer, and in time, persuade it to move away from the employed model.
The analysts believe the gig economy model is “superior” to the employed model for food delivery.
“Specifically, the freelance model allows for a liquid marketplace of fungible units of labour,” while a fixed labour model doesn’t have the same flexibility, making it difficult to react to changes in real-time demand.
“An employed labour model will always have to carry contingencies (and therefore cost) that a freelance model doesn’t need to.”
The U-turn by management should also be welcomed by the market as a step towards putting delivery at the heart of its strategy, the broker said.
“For example, we expect the UK embrace of the gig economy to now accompany investments into dark stores for grocery, putting Just Eat on a similar footing on strategy to peers,” analysts said.
A dark store is essentially a location used for delivery or click-and-services, but not one where customers can walk in and shop in a traditional sense.
