Deliveroo's Italian arm placed under supervision over alleged labour exploitation

Adds Deliveroo statement in paragraph 4 and details from judicial decree in paragraph 8

By Emilio Parodi

MILAN, Feb 25 (Reuters) - Milan prosecutors have placed the Italian arm of food delivery platform Deliveroo under judicial supervision and its chief executive under investigation for alleged exploitation of workers, judicial documents seen by Reuters showed on Wednesday.

The legal action comes just two weeks after Italian prosecutors launched similar proceedings against the local arm of Spanish delivery service Glovo.

In the latest case, the prosecutors appointed a judicial administrator to oversee the company to "regularise" its workers and to monitor compliance with labour rules and conditions.

Deliveroo said in a brief statement it was reviewing the legal documentation and cooperating with the investigation.

The British-based firm was acquired last year by U.S. meal delivery company DoorDash DASH.O for about 2.9 billion pounds ($3.92 billion).

Prosecutors said in a 60-page document seen by Reuters that Deliveroo Italy had around 20,000 so-called "riders" working throughout the country, including 3,000 in the Milan area.

They said the cycle couriers were formally self-employed but in practice worked as employees, because they were managed through an IT platform that determined their working conditions.

Besides targeting Deliveroo Italy, prosecutors also requested documents from several other unnamed companies that had dealings with the food-delivery platform and used the same workers to deliver their products.

WORKING SEVEN DAYS A WEEK, UP TO 17 HOURS A DAY

According to the decree served by a police labour unit, Deliveroo riders were paid below the poverty line, averaging between 3 euros and 4 euros ($3.53-$4.71) gross per delivery. Transport and equipment were at the expense of the riders.

National statistics bureau ISTAT set the poverty threshold for a single worker in 2024 at some 730 euros a month, while for a couple living together it was 1,218 euros.

In some cases, the pay for Deliveroo riders "was up to about 90% below the poverty threshold and collectively bargained contracts", the prosecutors wrote.

The decree listed signed statements from 54 workers, almost all immigrants from Pakistan and Nigeria.

All of them said on the record that they worked between 10 and 17 hours a day, seven days a week, with earnings barely enough to pay for a shared room, cover their food requirements and send some money to families back home.

"The checks carried out point to a situation of genuine labour exploitation, perpetrated for years to the detriment of a very large number of workers, who receive pay that is disproportionate to the quantity and quality of the work performed," prosecutors wrote.

"This illegal situation must be brought to an end as soon as possible, also because it involves a significant number of workers who live on earnings below the poverty line."

The operation was the latest step in a wider crackdown in Italy on labour exploitation in a variety of business sectors over the past three years.

($1 = 0.8487 euros)

(Reporting by Emilio Parodi, editing by Giselda Vagnoni and Crispian Balmer)

((emilio.parodi@thomsonreuters.com; +39 06 8030 7744))