HR · 13 October 2015

Here’s how one London startup is managing to pay its employees the living wage

Gophr's full-time couriers are offered the equivalent of £11.10 per hour
Gophr’s full-time couriers are offered the equivalent of £11.10 per hour

A new London-based startup has brought in the living wage, making it the first capital-based delivery service to do so.

George Osborne’s announcement in the Summer Budget that a new national living wage would come into force in April 2016, at £7.20 an hour, has sparked much concern among smaller firms, as well as specific sectors such as retail and hospitality, fearing the impact it will have on them.

The ONS also recently released new figures that revealed the proportion of workers who are not being paid the living wage is actually increasing. Some six million UK workers are paid under the hourly rate – calculated to cover the basic cost of living.

So, how has one new firm in the capital managed to buck the trend and bring in the living wage for its workers? London cycle courier Gophr utilises an app-based booking system, which it says has cut costs and enabled the firm to pay more to its riders. It offers full-time riders the equivalent of £11.10 per hour – nearly £2 more than the London living wage at £9.15.

It has won accreditation from the Living Wage Foundation, as well as praise from London Mayor Boris Johnson, who said: “I have long championed the London living wage and I am very pleased that Gophr is getting involved. It is great news for their couriers and I hope other businesses across the capital will follow their lead.”

The Angel-based business bills itself as part of “a new breed of innovative companies” using digital technology to deliver a social benefit”, with its app allowing users to book a job with the nearest or best available cycle courier in the Gophr network.

Seb Roberts, founder of Gophr
Seb Robert, founder of Gophr

Founder Seb Robert said cutting out costly processes and call centres had allowed Gophr to offer its riders more money per delivery. The business model sees Gophr take a 20 per cent cut of every job booked and completed, while the rest goes to the courier.

Robert admitted that “paying higher wages to staff when setting up a fledgling business can be a scary prospect” and told Business Advice his company hadn’t made the decision “without giving it a lot of thought up front”.

He researched it extensively and got in contact with the Living Wage Foundation, when “it became immediately apparent that we would be in good company and if anything, it could help us win business”.

The volume of work full-time couriers can take on means they can earn the equivalent of £11.10 per hour, with this amount including an allowance towards bike running costs.

Robert added: “We felt passionately that the same-day delivery industry in London could be improved by technology so we started by giving a fairer deal to its riders.”

“We are proud to give businesses across London a living wage alternative to use for their delivers, but we were not surprised by the ONS statistics. We hope more companies will now begin to do all they can to offer living wage levels of pay as quickly as possible.”

The programme manager at the Living Wage Foundation, Caroline Reilly, said Gophr announcing its accreditation was “a fantastic first step of leadership in a low-paid industry”.

The Independent Workers Union of Great Britain (IWGB) has been campaigning to raise rates in London’s “notoriously low-paid” courier industry, and president Jason Moyer Lee said that Gophr’s introduction reflected that “a small and new company is still capable of providing an ethical example for the industry”.

The team at Gophr are “feeling confident” about the firm’s prospects after making the commitment. “Our technology allows us to reduce the costs associated with running a business of this type,” Robert reiterated, though he acknowledged “only time will tell whether we’ve made the right decision”.

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ABOUT THE EXPERT

Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.

Business development