Deliveroo's Italian arm to pay workers 40% more after labour exploitation probe

(Removes reference to riders "employed by" Deliveroo in paragraph 5, no other changes to text.)

MILAN, Aug 28 (Reuters) - The Italian arm of food delivery platform Deliveroo said on Friday it would hike the pay for its riders by 40%, months after Milan prosecutors placed it under court administration for alleged labour exploitation.

The British-based firm, owned by U.S. company DoorDash, was accused by the prosecutors of paying its approximately 20,000 workers below the poverty line, averaging between €3 and €4 (3.49$-4.66$) gross per delivery.

Deliveroo said in a statement it had outlined a series of concrete measures which, "once verified, represent an important step towards the lifting of judicial control and the closure of the criminal investigation".

Milan prosecutors did not publicly respond to Deliveroo's pledge, and a source with direct knowledge of the matter said the company had not yet formally requested the lifting of the judicial administration.

Deliveroo said it would increase its minimum pay rates to €14 per hour from €10, and introduce a number of safety measures including a cap on working hours for its riders.

The document placing Deliveroo under judicial supervision in February said many riders worked seven days a week and up to 17 hours per day.

GLOVO ALSO UNDER COURT SUPERVISION

The local arm of Spanish delivery service Glovo, which in February was also placed under court administration by Milan prosecutors, announced similar improvements in May for its workers, including a 40% pay hike to at least €14 per hour.

The offer, however, has not satisfied prosecutors. They gave a negative opinion to Glovo's request - which has to be assessed by a judge - to have the court administration lifted, according to a document dated August 18 and seen by Reuters.

Glovo's workers were still being exploited, and are not being paid for at least 30% of the hours they work, prosecutors said. They also said riders should be hired as company staff, rather than on a self-employed basis.

Glovo, owned by Germany's Delivery Hero, said it would present to the court “the reasons why we believe the measures taken adequately address the issues raised. Glovo will continue, as it has done so far, to cooperate fully with the authorities.”

($1 = 0.8590 euros)

(Reporting by Anna Uras Emilio Parodi, editing by Gavin Jones and Alvise Armellini)