Following the news that Deliveroo’s shares have dropped over worker pay ahead of IPO;

Laura Petrone, Senior Thematic Research Analyst at GlobalData, a leading data and analytics company, offers her view:

“Investors are no longer just looking at the books when deciding where to put their money. Environmental, social and governance (ESG) issues are now of primary concern. The recent UK Supreme Court ruling on the status of Uber drivers was a watershed moment, marking the start of a new era in the gig economy. In this new phase, investors will be increasingly concerned over workers’ basic rights and of potential regulatory risks as governments around the world turn to regulate this business model.

“The fact that three of Britain’s biggest asset managers – Aviva, Legal & General, and Standard Life Aberdeen – haven’t backed Deliveroo’s IPO suggests that investors are concerned about its stance on the classification of its riders as self-employed contractors. Impressive revenues alone are no longer enough for investors. They also demand sound ethics and good governance.

“It needs to be seen whether this new, regulated gig economy model will be sustainable in the long run as the potential extra costs could make gig economy companies less attractive to investors.”