Deliveroo has offered concessions in its pay dispute with workers after the Government told the food delivery company must pay employees the minimum wage unless it reaches an agreement in the courts to treat them as self-employed.
The firm has been heavily critised for a proposed pay deal that Labour described as "a return to a Victorian system".
Hundreds of Deliveroo workers have protested over piloted plans to pay workers £3.75 per delivery rather than the current terms where they received £7 an hour plus £1 per delivery.
Following the Government's line, the firm will now give workers the chance to opt out of the scheme.
The firm will also guarantee at least £7.50 an hour and pay petrol for those who continue to participate.
Earlier today the Department for Business, Energy and Industrial Strategy insisted Deliveroo must pay employees the so-called "national living wage" (NLW) of £7.20 an hour unless a court or HM Revenue and Customs defines them as self-employed.
A spokesman said: "The Government is determined to build an economy that works for all - that includes ensuring everyone gets a decent wage.
"Individuals cannot opt out of the rights they are owed, nor can an employer decide not to afford individuals those rights. Employers cannot simply opt out of the NLW by defining their staff as self-employed."
The company delivers food from thousands of restaurants which do not have their own delivery service including chains such as Pizza Express, Byron burgers and Gourmet Burger Kitchen.
The firm faced criticism on Friday from shadow business secretary Jon Trickett, who insisted riders were "right to demand proper pay and conditions".
The Labour frontbencher added: "Flexible working may suit some workers who have domestic or other commitments, but it should not be used as an excuse by employers to cut costs and increase employees' insecurity."
Deliveroo has said that the new pay deal, currently being trialled in parts of London, would benefit their employees. In a blog post, it said pilots of the pay-per-delivery system have doubled their average hourly fees during the busiest times.