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Deliveroo court win is mere amuse-bouche

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A Deliveroo delivery rider cycles in London, Britain, March 31, 2021. REUTERS/Toby Melville

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LONDON, June 24 (Reuters Breakingviews) - Finally, some good news for Deliveroo (ROO.L). A UK court ruled on Thursday that the London-based food delivery company’s riders are not employees, meaning it doesn’t owe them benefits like holiday pay. Deliveroo’s shares rose by 9%, taking its market value to 5 billion pounds ($6.9 billion).

The problem is that the dispute over gig workers’ rights isn’t going away. In other countries like the Netherlands, courts have ruled that Deliveroo’s riders are employees. Uber Technologies (UBER.N) recently lost read more a related court case in London. The European Commission will later this year release recommendations on potential gig-economy legislation.

Those looming threats may explain why Deliveroo is still trading roughly one-third below its initial public offering price, set in late March read more . Its current share price implies an enterprise value to 2021 sales multiple of just over 2 times, compared with almost 13 times for U.S. peer DoorDash (DASH.N), using Refinitiv data. A palatable appetiser hardly guarantees an equally satisfying meal. (By Karen Kwok)

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Editing by Liam Proud and Oliver Taslic

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