Wednesday

8th Feb 2023

Brussels unveils rules for Uber, Deliveroo, and other gig workers

  • There are currently over 28 million people in the EU working via digital platforms (Photo: Deliveroo)
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The European Commission on Thursday (9 December) unveiled its legislative proposal for improving the working conditions of so-called platform or gig workers, like Uber drivers or Deliveroo riders.

The move has been strongly opposed by industry players such as Bolt, Uber or Free Now, who claim that new rules would lead to the loss of hundreds of thousands of jobs.

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The platform economy can present advantages, from flexible schedules to the possibility to work for several platforms to maximise income.

However, gig workers usually lack health insurance, paid leave, holidays and other type of labour benefits.

"People are at the heart of this business model [and] they deserve the same protection and conditions as any other worker in any country," said EU economy commissioner Valdis Dombrovskis.

New rules will introduce a legal "rebuttable presumption of employment" for people working via online work platforms - setting a set of five criteria to determine whether the platform is that worker's "employer" or not.

If the platform meets two or more of these criteria, it would be legally presumed to be an employer – and, as a result, those working for this company would have the status of "workers" and have the right to a minimum wage (where it exists), collective bargaining, sick pay or pension benefits.

Nevertheless, platforms will have the right to contest this classification if they can prove there is no employment relationship reliant on them, according to national law.

This EU initiative aims to fight back against the so-called fake self-employment in the gig economy, which occurs when a person registered as self-employed is de facto an employee.

There are currently over 28 million people in the EU working through digital platforms, and their number is expected to reach 43 million by 2025.

The majority of Uber drivers or Deliveroo riders tend to be self-employed, and the EU commission estimates a total of between 1.72 million and 4.1 million people are expected to be reclassified as workers under the new rules.

Beyond employment rights and protection, this means that those earning below the minimum wage would enjoy a collective annual increase of up to €484m.

Case study: Spain

Spain introduced a 'rider law' in August to respond to protests over precarious jobs and low salaries in the gig economy.

However, according to the Spanish riders association, the law has brought "very rigid and inflexible models" – leading Deliveroo to exit the country and reducing the number of available platforms.

"What the sector truly wanted and needed was a flexible model with additional protection - and just the opposite happened. Most of us barely reach the minimum salary after the rider law entered into force," they said in a letter to the EU jobs commissioner Nicolas Schmit, seen by EUobserver.

They also said that more than 8,000 couriers have lost their jobs in Spain since the law entered into force.

Building on this, the Estonian mobility company Bolt estimated that the new EU rules would lead to 150,000 drivers losing their jobs across the EU.

"As it stands, it [the commission proposal] would make almost all ride-hailing drivers and couriers be reclassified as employees, against their own will for the vast majority of them," Aurélien Pozzana, Bolt head of EU public policy, told EUobserver.

"It's high time to better assess the situation and ask the drivers and couriers what they really want," he added.

Legal uncertainty

Meanwhile, revenues of online gig platforms have jumped from an estimated €3bn in 2016 to around €14bn in 2020, due to increasing customer demand and the emergence of new competitors.

However, these new business models have brought legal uncertainty and a rising amount of litigation – with many court rulings still pending.

That is why "there is a need to have a European level playing field for their [platforms] operations," said commissioner Schmit.

Earlier this year, an Amsterdam court ruled against Deliveroo, arguing that the company controls riders' schedules, and therefore, they are workers rather than contractors.

Similarly, a ruling of the UK's top court concluded this year that Uber drivers are employees, entitled to benefits like holiday pay and pensions. However, if passed, EU law would only apply to member states.

According to the EU commission, most rulings tend to reclassify independent contractors as workers, and platforms as employers.

The draft legislation will have to be approved by both EU countries and MEPs.

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