Electric van courier Packfleet has informed workers of plans to sack 30 employed drivers and force them to become self-employed, City A.M. understands.
The decision was announced shortly after Packfleet secured $10m (£8m) in expansion funding from venture capitalists, including General Catalyst, Voyager Ventures and Creandum in March.
The ‘ethical’ van courier has previously said it refused to “take advantage of gig economy workers to deliver your parcels. We fully employ all of our permanent drivers, meaning they get our full benefits packages.”
But the move has sparked backlash from the Unite Union, who described the behaviour as “disgusting.”
Unite general secretary Sharon Graham said: “The company’s ethical credentials flew straight out the window, no doubt as soon as the venture capitalists started circling and demanding ‘efficiencies’.”
“Unite is offering our members complete support in fighting against these pernicious and hypocritical plans.”
One Packfleet driver said: “After being promised security of employment and building my life around this job, the company’s announcement that it is seeking to sack all of the drivers and replace them with gig economy contracts is a kick in the teeth. This is no way to treat people.”
Consultations over the redundancies are ongoing.
Packfleet, which runs a fleet of around 130 electric vans, ships to hundreds of businesses across London. Its clients include Hurr, Pizza Pilgrims, Field & Flower, and Lay & Wheeler.
It is one of many expanding European delivery startups looking to serve the growing demand for zero-emission last-mile deliveries to retailers. Package volumes grew fivefold in 2023, and Chief Tristan Thomas said they will likely achieve similar growth this year.
The sackings may draw unfavourable comparisons with controversial fire and rehire practices, in which companies sack employees before offering them a contract on new, often less favourable terms.
Ferry operator P&O made headlines in 2022 when it fired 800 of its employees and then rehired cheaper agency workers.
Packfleet’s employees will not receive a new full-time contract; instead, they will be pushed into more work as self-employed drivers.
Responding to City A.M. request for comment, Packfleet chief executive Tristan Thomas argued: “For the past two years, some of our drivers have been paid an hourly rate. This means their earnings have been effectively capped, no matter how many parcels they delivered, unfairly hurting our best drivers.
“With our new, alternative worker model, drivers can ask to deliver more parcels and have busier routes, and their pay will increase accordingly — we continue to use our routing software so no-one will be asked to do more than they can and ensure quality is as high as it always has been.
“Under this new model, as well as being entitled to paid holiday and pension contributions, all drivers will continue to be paid at least the Real Living Wage.
“We’re committed to a fair employment model that works for everyone and we strongly believe this meets and exceeds those criteria and is better for our drivers.”