Two former bosses of Deliveroo were given suspended one-year prison sentences and fined 30,000 euros ($32,380) by a French court on Tuesday for abusing the freelance status of riders working for the British takeaway delivery platform.
The company itself was also fined the maximum penalty of 375,000 euros ($404,625), the court ruled.
The ruling against Deliveroo may reverberate outside France at a time when the gig economy, built largely upon digital apps and self-employed workers, faces a number of court challenges that may redefine working conditions.
Deliveroo said in a statement that it "categorically contests" the French court's ruling and was considering whether to appeal. It will maintain operations on the French market, it added.
Its statement said the court decision referred to an early version of its operating model and had no consequences for the way it operates today.
"Our model has since evolved in order to be more in line with the expectations of our delivery partners, who want to remain independent ... Deliveroo will continue to operate with a model that offers these independent providers a flexible and well-paid business," the company said.
Former riders have sued Deliveroo for alleged abuse of their freelance status and claim the company should have hired them as employees.
Under French law, employee status grants rights, including unemployment benefits, social security and pension contributions.
France, after Britain, is the second-largest market for Deliveroo, operating in more than 200 cities with restaurant partners.
Since its London launch in 2013, Deliveroo has expanded into towns and cities across Europe, Asia, Australia and the Middle East.
But at times it has drawn criticism for its reliance on freelance couriers, with many saying the so-called "gig economy" workers should be considered employees.
Usually the couriers are freelance workers who have often battled for a guaranteed number of hours' work and other benefits.
(FRANCE 24 with REUTERS and AFP)
