Who Really Pays for Cheap Delivery?

Evri, Private Equity and the Price of Growth

Evri was sold in 2024 in a deal reportedly valuing the company at £2.7 billion.

I delivered its parcels.

By the time I left in early 2025, I was earning less per parcel from delivering Evri’s parcels than I had when I started six years earlier, even though I was bearing greater personal costs.

This raises an important question about what private equity calls value creation.

In the first article in this series, I examined how takeover debt can leave a company too poor to survive being bought. In the second, I asked when a leveraged buyout should really be considered successful.

Evri presents a different case.

This is not a company collapsing under the weight of a failed acquisition. It is a growing and profitable business that became substantially more valuable under private-equity ownership.

The question is how that success was achieved, where the additional value came from and how much of it reached the people completing the final mile.

An apparent private-equity success

Evri was previously Hermes UK and was principally owned by the German retail group Otto.

In 2020, the American private-equity firm Advent International acquired a 75 per cent stake. The terms were not officially disclosed, although the price of the UK stake was subsequently reported to have been approximately £850 million. Otto retained the remaining 25 per cent.

Advent did not simply buy the company and wait.

It says it invested nearly £200 million in Evri, including new technology and £60 million for a large automated distribution hub in Barnsley. Hermes was relaunched as Evri in 2022, the company won new clients and its parcel network expanded. Advent International

In the 53 weeks ending in February 2024, Evri delivered more than 730 million parcels. Revenue rose by 15.2 per cent to more than £1.7 billion, adjusted EBITDA increased to £292 million and pre-tax profit more than doubled from £51 million to £119 million. The company also reported investing £32 million in customer service and operations during the year. Evri

Advent then agreed to sell Evri to funds managed by Apollo. The financial terms were not officially disclosed, but the transaction was widely reported as valuing the company at approximately £2.7 billion. Advent and Otto both sold their stakes, and Apollo completed the acquisition in August 2024. Apollo, Reuters

Advent invested in the business. Parcel volumes, revenue and profits increased. The company was sold at a much higher reported valuation.

By the normal scorecard of private equity, Advent succeeded.

But a higher valuation does not explain where the value came from.

The economics of cheap delivery

The parcel-delivery industry has become one of the invisible foundations of modern retail.

Customers can order clothes, household goods or electronics from a British retailer or an overseas marketplace and have them carried hundreds or thousands of miles before arriving at their door. Delivery is often described as free or offered for a price that appears remarkably low.

It is not free.

The cost has simply been distributed across a long chain involving retailers, warehouses, freight companies, sorting hubs, local depots and couriers.

Competition for the enormous contracts offered by major retailers and rapidly growing ecommerce companies is intense. Winning one can add millions of parcels to a carrier's network. Greater volume improves route density, makes expensive hubs more productive and spreads central costs across more deliveries.

But a contract won on price still has to be made profitable.

In my experience, Evri’s growth was supported partly by securing very large delivery contracts in a fiercely price-competitive market. The resulting volumes made the company larger and contributed to the growth story eventually presented to potential buyers.

That does not mean those contracts were inherently bad or loss-making. I have not seen their confidential terms, and Evri's published profits show that the company found a way to make its overall model work.

The relevant question is who carried the costs that made those prices possible.

For the final stage of the journey, much of that responsibility fell upon self-employed couriers.

The courier supplies the infrastructure

Most people see a courier arrive in a car or van and naturally associate the entire operation with the delivery company whose name appears on the parcel.

But Evri's last-mile model depends heavily upon couriers supplying much of their own infrastructure.

Couriers generally provide their own cars or vans. They pay for fuel, delivery insurance, repairs, tyres, servicing and depreciation. They load their vehicles, organise their rounds and absorb the practical disruption caused by traffic, road closures, inaccessible properties and customers who are not at home.

Under the arrangement on which I worked, payment is attached principally to parcels successfully delivered or collected. An unsuccessful attempt still consumes time and fuel, but may produce no corresponding parcel payment.

That creates a powerful incentive to complete a delivery on the first visit.

It also helps explain a familiar customer complaint. A courier deciding whether to leave a parcel in a location that may not be ideal is not making that decision within the security of an hourly salary. The courier may already have paid the cost of travelling to the address and may receive nothing if the parcel returns to the vehicle.

That does not excuse an unsafe delivery. Couriers remain responsible for making sensible decisions.

But any serious attempt to improve delivery behaviour must recognise the incentive created by the payment model. A system that rewards only completion should not be surprised when completion becomes the overriding pressure.

Self-employment can also offer couriers flexibility over how they organise their work, and some prefer it to conventional employment. That benefit is real. But flexibility does not remove the cost of providing a vehicle or determine whether the rate paid for the work is sufficient.

As self-employed contractors, couriers can also appoint substitutes to undertake deliveries on their behalf. This is a legitimate feature of self-employment, but substitution and subcontracting can make it more difficult to establish who is actually completing the work.

In January 2025, the House of Commons Business and Trade Committee put reports to Evri that subcontractors were using people without the legal right to work in the UK to cover delivery rounds. The Committee also raised allegations of inadequate background and insurance checks and that Evri had turned a blind eye to these practices.

Evri’s Director of Legal and Public Affairs, Hugo Martin, said that he did not recognise the allegations. He pointed to the company’s code of conduct, anonymous whistleblowing arrangements and the presence of Evri employees and GMB representatives at delivery sites, saying that reported concerns would be investigated.

These remain allegations rather than proven company-wide practices. Nevertheless, they illustrate another potential consequence of a highly flexible labour model: the company can expand its delivery capacity without directly employing every person completing the work, while effective oversight of that workforce can become more difficult.

The same model also offers Evri considerable flexibility.

When parcel volumes rise, the company can expand its final-mile capacity without purchasing every delivery vehicle or employing every person who drives one. When fuel, insurance and repair costs increase, much of the immediate increase is borne by the courier rather than appearing as a direct increase in Evri's fleet costs.

This is commercially efficient.

It is also a transfer of cost and risk.

More parcels, lower real earnings

I was doing comparable courier work six years ago.

When I left Evri, I was delivering more parcels, supported by better route density and technology, but the amount I received per parcel had fallen significantly. That was before properly accounting for inflation or the increased cost of buying, maintaining, insuring and fuelling a vehicle. My own receipts show that I was paying approximately £1.11 a litre for diesel in 2020. On 10 August 2026, diesel was £1.73 a litre at Costco, an increase of roughly 56 per cent. That comparison is personal rather than a measure of average national fuel prices, but it illustrates the change in one of the largest operating costs. Insurance, servicing, repairs and tyres have also become more expensive for me.

My experience cannot establish what happened to every Evri courier. Rates vary by round, parcel type, contractual arrangement and local circumstances.

It does, however, expose the limits of company-level growth figures.

If a business delivers more parcels, earns more revenue and becomes more profitable, it is tempting to assume that everybody contributing to that improvement must be sharing in the success.

That does not necessarily follow.

Productivity can rise while the value of an individual worker's contribution falls. A company can become more efficient because technology and route density allow each courier to deliver more. If the courier's pay does not rise alongside that output, a larger share of the benefit remains elsewhere in the chain.

Retailers benefit from competitive delivery prices.

Customers become accustomed to cheap postage.

The delivery company gains volume, revenue and market share.

Its owners gain a more valuable asset.

The courier supplies the vehicle, carries much of the operating risk and may see the real value of the work decline.

The court case Hermes lost

The tension between self-employment and the reality of courier work predates Advent's ownership.

In 2018, a group of Hermes couriers brought claims against Hermes Parcelnet in the Leeds Employment Tribunal.

The tribunal found that the claimants were workers for the purposes of employment, working-time and minimum-wage legislation. The written agreements described broad rights of substitution, but the tribunal concluded that the contractual documents did not accurately reflect how the relationship operated in practice.

The ruling applied directly to the claimants rather than automatically converting the status of every courier in the network. It nevertheless established that describing somebody as self-employed does not decide their legal rights when the practical relationship points towards worker status. Leyland and others v Hermes Parcelnet, contemporary report

In 2019, Hermes and the GMB union introduced the Self-Employed Plus model.

Couriers choosing the arrangement remained self-employed but gained additional protections, including guaranteed earnings, paid holiday in exchange for an agreed reduction in parcel rates, and union representation. Pension contributions, parental leave and further benefits were added later. These were meaningful improvements and, by the standards of the gig economy, genuinely innovative. GMB, Evri

Those protections also placed a floor beneath parts of the courier model.

Once guaranteed rates, holiday pay, pension contributions and collective representation exist, reducing courier costs becomes more complicated. That is precisely what employment protections are supposed to achieve. They prevent competition and financial pressure from pushing the value of labour indefinitely downwards.

Access to rights can narrow without their formal removal

Formal protections do not always have to be abolished for access to them to narrow.

Existing couriers can retain an established contract while new starters are offered different arrangements. People who leave can discover that they cannot return on their former terms. Over time, ordinary turnover can reduce the proportion of the workforce covered by the earlier agreement.

That describes my experience.

When I left Evri, I could not subsequently return on my previous Self-Employed Plus agreement with the same rights. The parcel rates available to me were also significantly lower.

I cannot say that this was part of a deliberate strategy to remove protected couriers. I can say what the practical result was for me: when I returned as an experienced courier, the terms available to me were worth considerably less than those I had previously held. Consequently, I did not stay long.

Evri continued negotiating with the GMB and subsequently announced an enhanced agreement. In December 2024, it said couriers not already enrolled in Self-Employed Plus would have an opportunity to join from January 2025. The scheme provided access to guaranteed minimum-wage protection, paid holiday, pension contributions and parental leave. Eligible Self-Employed Plus couriers who were GMB members were also offered insurance-backed sickness payments. Evri

That development should be recognised.

It also reinforces the underlying point. The commercial value of a courier agreement cannot be measured by the existence of a scheme alone. Access, parcel rates, the method used to calculate guaranteed earnings and the practical cost of completing the work all matter. A stated hourly guarantee does not necessarily represent the courier’s effective earnings after fuel, insurance, maintenance and depreciation have been paid.

The subsequent deterioration in the relationship between Evri and the GMB makes that distinction particularly important.

A GMB-published record of an Evri-GMB joint forum held in April 2025 documents the union’s national committee expressing serious dissatisfaction with the company. The GMB said the committee felt it was being treated with disrespect and had become little more than ‘lip service’. It said earlier agenda items had not been acted upon, members were demanding action and unresolved issues were pushing the relationship towards a full dispute.

The union asked for more commitment from Evri and questioned whether the people attending the meetings had sufficient authority to make decisions.

Evri disputed the suggestion that matters were not progressing. Its representatives said the company wanted to maintain a good working relationship, avoid a ballot and repair any perception of disrespect. They also said clearer decision-making authority would be put in place.

The record therefore presents both sides, but it shows that serious difficulties had developed within the negotiating relationship following Apollo’s acquisition.

Those difficulties continued into the pay negotiations. The offer relating to the 2025 pay round was not put to couriers until May 2026. For the first time since its recognition agreement with Evri began in 2019, the GMB recommended that couriers reject the proposal. The union said the offer was a year late and could represent a reduction in pay for many couriers.

Almost 97 per cent of the more than 6,000 couriers who participated voted to reject it.

Evri disputed the union’s assessment. It described the proposal as a multimillion-pound investment offering guaranteed minimum equivalent hourly rates above the National Living Wage, additional bonus payments and rate protection until at least April 2027.

The qualification “until at least April 2027” leaves an obvious question about what happens thereafter. It does not establish that Evri intends to remove rate protection, but nor does the proposal provide couriers with certainty beyond that date.

Taken together, the GMB-published record, the delayed pay offer, the union’s unprecedented recommendation to reject it and the overwhelming ballot result demonstrate serious strain within the negotiating relationship. They do not establish that Apollo caused that deterioration, but they raise a legitimate question about how the relationship has developed under its ownership.

Investment, dividends and debt

It would be wrong to describe Advent's ownership as nothing more than cost-cutting.

The firm says nearly £200 million was invested in technology and infrastructure. Evri points to substantial spending on customer service and operations. Parcel volumes increased, new partnerships were formed and the network became capable of processing far more work.

Those are genuine forms of value creation.

There is another side to the financial story.

Motor Transport reported, based on the company’s accounts, that Evri paid a £762 million dividend to shareholders in 2022 and that net debt subsequently rose to approximately £1.3 billion. Those figures require context and do not prove that investment stopped or that debt alone funded the shareholder payment. They do show that substantial value was returned to owners while significant financial obligations remained within the business. Motor Transport

This is where the distinction developed in the previous article becomes useful.

Private equity can create and extract value at the same time.

Advent could invest in automation, improve operations, win customers and expand Evri while also arranging the business in a way that produced large returns for shareholders.

The question is not which description is exclusively true.

It is how the benefits and burdens were divided.

Apollo inherits the expectation

Apollo did not design the original courier model. It did not cause the employment tribunal dispute, which occurred years before its acquisition. Nor can it be held responsible for the entire decline in the value of courier work across a decade involving several owners.

It acquired Evri in August 2024 and described it as a successful business with significant potential for further growth.

Apollo described Evri's last-mile delivery model, technology and infrastructure as important competitive strengths. It said it intended to support the company's continued success and expansion. The detailed financing terms and the returns expected by Apollo's funds were not publicly disclosed.

Nevertheless, a private-equity fund acquiring a company at a reported valuation of £2.7 billion must eventually produce a return for its investors.

Apollo therefore began from a different position from Advent, having acquired an already expanded and highly profitable business at a substantially higher reported valuation.

Advent had already expanded the network, invested in automation, secured major contracts and demonstrated high profitability. Couriers were already supplying their vehicles and carrying substantial operating costs. Many of the most obvious efficiencies had already been realised.

Where does the next increase in value come from?

There are constructive possibilities.

Denser routes can reduce the time and mileage required per parcel. Better technology can improve loading, navigation and proof of delivery. Automation can lower sorting costs. More valuable international, business and premium services can improve the revenue earned from each item rather than relying only on higher volumes.

Evri has continued growing. For the year ending in March 2025, it reported more than 807 million parcels, revenue of £1.85 billion and adjusted EBITDA of £341 million. It also reported £57 million of investment in operations and technology. Evri

The combination with DHL eCommerce UK creates another route to scale. The Competition and Markets Authority cleared the transaction in September 2025. Evri acquired DHL's UK ecommerce business, DHL obtained a minority stake and Apollo remained the majority owner. The enlarged group was expected to handle more than one billion parcels alongside around one billion business letters. Competition and Markets Authority

Those changes may create genuine operational value.

There is also another possible source of value familiar across labour-intensive industries: obtaining more output without allowing the earnings of the people producing it to rise proportionately.

That option has practical limits.

Fuel, insurance, maintenance and vehicle depreciation cannot be negotiated away by a courier. Rates cannot fall indefinitely before experienced people decide that the work is no longer viable. Minimum-wage guarantees, contractual protections and union representation create further boundaries.

The pressure does not disappear.

It moves elsewhere.

A success for whom?

Evri is not Debenhams or Toys "R" Us.

It has not disappeared after a profitable private-equity exit. It remains a large, growing and commercially important company. Advent invested in the business and appears to have earned a substantial return. Evri has continued investing and expanding under Apollo’s ownership.

That makes Evri a more revealing case than an obvious corporate failure.

If a company collapses, asking who lost is straightforward.

When a company thrives, the transfer of value is harder to see.

Evri became larger.

Its owners benefited.

Customers and retailers gained access to an extensive low-cost delivery network.

By the time I left, I was delivering more parcels than I had six years earlier, at greater personal expense and for less money per parcel.

Any honest assessment of the company's success must find room for all four facts.

If some of a company’s growth depends upon contracts whose economics are supported by self-employed couriers absorbing rising costs while their rates fail to keep pace, is all of the resulting increase in value genuinely created?

Or has part of that value been transferred from the people doing the work to the company’s customers and owners?

The purpose of this argument is not to accuse Evri, Advent or Apollo of misconduct. It is to question a system of measurement that records rising volume, profit and valuation without necessarily recording whether the people completing the work share in that success.

Cheap delivery has been commercially transformative.

But it was never free.

Someone has always paid for it.

The money behind private equity

That leaves one further question.

Private-equity firms do not invest only the personal fortunes of their partners. Their funds can include capital supplied by institutional investors, including pension schemes managing the retirement savings of ordinary workers.

This creates a strange circularity.

Workers' savings can help finance acquisitions whose returns may depend partly upon limiting labour costs or transferring operating risks to other workers.

The pension fund may benefit from the return.

The courier, employee or supplier may bear part of the cost required to produce it.

The final article in this series will ask whether pension funds should invest in highly leveraged private-equity deals, and whether a financial return can be considered successful when the people whose money funded it also carry its wider consequences.

If you enjoyed this article, you may also find this one interesting:

It examines a very different subject, but asks a related question: what happens when the story being presented obscures the forces operating underneath?

Raleigh was a successful and recognisable British brand. Its parent company was nevertheless left carrying enormous acquisition debt following a leveraged buyout.

How can a company become too poor to survive being bought?

https://www.thegoodmethod.co.uk/good-thoughts/how-can-a-company-be-too-poor-to-survive-being-bought

About the author

Paul Clark is the author of The GOOD Book: A Behavioural Operating System for Escaping Debt and Rebuilding Control and the creator of The GOOD Method. If you enjoyed this article, explore more of his writing in GOOD Thoughts, listen to The GOOD Conversation podcast, or join the GOOD Community to receive new articles, podcast episodes, resources and forthcoming videos by email.