UberEats, Deliveroo workers drive French surge in new companies

PARIS (Reuters) – Food delivery workers fuelled an unexpected jump in the number of new companies created in France in June and July, French commercial court data showed on Tuesday, though almost all other industries suffered due to the COVID-19 pandemic.

Ubiquitous on bikes across Paris and other French cities, the number of self-employed riders delivering food for services like Deliveroo, Just Eat (AS:TKWY) or UberEats shot up when consumers were homebound during a two-month lockdown.

Many registered as companies once crisis restrictions eased, according to data from France’s commercial court clerks council CNGTC, which showed the number of new transport businesses jumping 29% in June and July from a year earlier.

That pushed up the overall number of newly-registered companies by 10% in those two months, although for the third quarter as a whole including May, registrations were down 5.5%, the data compiled by research firm Xerfi I+C showed.

While providing one bright spot as France braces for one of Europe’s worst economic slumps, the deliveries boom has also revived concerns over a “gig economy” model at odds with the level of welfare afforded to workers in other sectors.

It also contrasts with a worsening outlook for hotel owners, restaurants, retailers and companies in real estate or construction. The number of new company registrations fell in those sectors in the period.

Bankruptcy filings and requests for creditor protection were also down on a year earlier, by 42.5%, despite the economic shock dealt by the lockdown.

“The measures put in place by the government have prevented a wave of insolvencies,” said CNGTC head Sophie Jonval. The third and fourth quarters would be a greater test of companies’ financial health, she added.

In addition to a 300 billion euro ($354.5 billion) state-backed loan programme, the French government is going to guarantee 3 billion euros in quasi-equity loans to small businesses under its new recovery plan, which can be leveraged to 15 billion in order to shore up balance sheets.

($1 = 0.8462 euros)