26.5 C
New York
Thursday, May 23, 2024

The Gig Economy’s Days in Europe Are Numbered

When former Uber driver Yaseen Aslam first started campaigning for app workers’ rights back in 2014, the battle felt hopeless; like a “dark tunnel.” He claims academics told him it was impossible to succeed because his fellow gig workers were too disparate and the majority were people from ethnic minorities, groups that did not have high rates of union membership. Seven years later, Aslam—now president of the App Drivers and Couriers Union (ADCU), a group with thousands of members—can look across the UK and Europe and watch multiple court cases rule in favor of more employment rights for gig workers. “This has been a massive year,” he says. “We are now starting to see the light.”

Over the past 12 months, gig economy companies have spent a lot of time in court, as judges scrutinize a business model that promises workers more flexibility in exchange for fewer rights than traditional employees. But on December 9, the European Commission announced one of the biggest challenges to that business model yet, publishing a major new draft law designed to reshape the relationship between gig workers and the platforms that pay them. If passed, the rules could affect up to 4 million people, estimates the Commission, which suggests it is responding to a flurry of activity in national courts. “There are more than one thousand court rulings across the EU already [against] different platforms, and there are hundreds of cases still pending,” said European trade commissioner Valdis Dombrovskis in a press conference. “So the aim of this proposal is, among other things, to provide more clarity.”

The first landmark case of 2021 arrived in February, not in the EU but in the UK. Aslam was among a group of 25 drivers who challenged the way Uber classified them as self-employed. Britain’s Supreme Court ruled in the drivers’ favor, entitling them to rights such as the minimum wage and holiday pay. That case was only the start of a year which saw courts across Europe issue rulings that affected ride-hailing apps including Uber, Bolt, and Ola, as well as delivery apps such as Deliveroo and Glovo. Uber said it will appeal a similar decision made by a Dutch court in September that said drivers were employees not contractors. In Belgium, a court decided in November that only Uber drivers who have official taxi licenses may continue to operate, which the company said excluded 95 percent of drivers on the app. This week, a High Court in London ruled that the way ride-hailing apps claimed they were “agents,” facilitating a contract between a driver and a passenger, was not compatible with the city’s transport laws. Instead, companies such as Uber and Free Now would have to take responsibility for rides on the app themselves.

“These platform apps started with this idea that they were disruptors … helping facilitate business on behalf of independently contracted drivers,” says Jeffrey Vogt, the rule of law director at the Solidarity Center, a workers rights group in Washington, DC, that tracks court cases worldwide. This setup was accepted for years, he adds, but recently there has been an explosion in litigation. London’s High Court decision is just one example of this facilitator status being dismantled. “The majority of the judicial opinion inside and outside of Europe is finding an employment relationship,” Vogt says. “There’s still outliers, but I think that is definitely the trend.” One of those outliers includes a December 8 decision in Belgium, where a court found Deliveroo riders could not be reclassified as employees.

However the general consensus among Europe’s judges means the gig economy business model is unlikely to survive in Europe in its current form, says Valerio De Stefano, a professor of labor law at the Belgian university KU Leuven. “In my opinion, [gig economy companies] will have to decide whether they want to run the business model according to the rules or completely change their business model by allowing workers to set their own fees and not expelling them from the platform for low ratings.” Avoiding change will also be harder if court wins continue to be solidified by regulation. In May 2021, Spain’s government converted a 2020 Supreme Court ruling into law, requiring gig workers to be recognized as employees. A similar bill was also approved by Portugal’s government in October 2021 and is waiting to receive a final stamp of approval from Parliament. “The litigation successes we have had are important because they are shaping legislation and putting pressure on lawmakers to clarify labor law,” says Johanna Wenckebach, director of Frankfurt’s Hugo Sinzheimer Institute, a research organization that works closely with Germany’s labor unions.

The proposed EU rules attempt to provide this clarity by defining the line between a self-employed platform worker and one that deserves the same rights as an employee. That line, the Commission says, is actually a list of five criteria, and if a platform meets two or more, its self-employed workers should be reclassified. The criteria focus on how much control a platform has over a worker—whether the platform monitors their performance, decides how much they are paid or what they wear, whether the worker can choose their hours or work for other companies. If the law is passed, it would also mean workers would no longer have to prove they are employees; instead platforms would have to prove they are not. “That’s a major shift, because platforms work with algorithms,” says Wenckebach. “Algorithms are black boxes, and it's very hard for workers to prove the necessary facts that can show that they actually are employees and have employees’ rights.”

Most PopularBusinessThe End of Airbnb in New York

Amanda Hoover

BusinessThis Is the True Scale of New York’s Airbnb Apocalypse

Amanda Hoover

CultureStarfield Will Be the Meme Game for Decades to Come

Will Bedingfield

GearThe 15 Best Electric Bikes for Every Kind of Ride

Adrienne So

But gig economy platforms are not going to give up their business model without a fight. “Uber is committed to improving the working conditions for the hundreds of thousands of drivers and couriers who rely on our app for flexible work,” says an Uber spokesperson. “But we are concerned the Commission’s proposal would have the opposite effect—putting thousands of jobs at risk, crippling small businesses in the wake of the pandemic, and damaging vital services that consumers across Europe rely on. Deliveroo echoed those comments, adding, “These proposals will increase uncertainty and will be better for lawyers than self-employed platform workers.” Delivery Platforms Europe, a trade group representing members including Bolt, Deliveroo, Delivery Hero, Govo, and Uber Eats, said in a statement that an EU-wide reclassification could force up to 250,000 couriers out of delivery work, adding that 67 percent of 160,000 surveyed couriers said their primary reason for working with delivery platforms is flexibility.

“There may be cases where the self-employed are not satisfied with the fact that they are presumed to be workers,” said trade commissioner Dombrovskis. “But to me, it seems there are far more people challenging their status as self-employed than there are people challenging their status as workers.” Some companies operating in Europe have already preempted the region’s change in mood. The German grocery delivery company Gorillas has offered riders fixed employment contracts since it launched in May 2020. In December 2020, Dutch food delivery company Just Eat also said it would offer UK workers hourly wages, sick pay, and pensions. EU jobs commissioner Nicolas Schmit pointed to these types of platforms as proof that the gig economy companies can change and still thrive. “They work, they operate, and they are profitable.”

Companies using the gig economy model have disputed this point about profit. When Spain ruled that gig workers must be considered employees, food delivery app Deliveroo left the country altogether. In a statement, the company said that succeeding in Spain “would require a disproportionate level of investment with highly uncertain long-term potential returns.” Investors are now worried the Spanish scenario could be replicated across Europe. Share prices of gig economy companies have been sliding throughout the year. Since January 2021, Uber’s New York share price is down 24 percent, and the German firm Delivery Hero’s shares have dropped 21 percent in Frankfurt.

However, the European Commission’s proposals do not take immediate effect. Instead, member states could spend years debating the intricacies, and the rules are unlikely to become law until at least 2024. That creates space for fierce campaigning and lobbying on both sides. European worker unions and their supporters are bracing for a repeat of the Prop 22 ballot in California in 2020. Following a $200 million effort by Uber, Lyft, DoorDash, and other on-demand delivery companies, residents in the US state voted to override a bill that would have forced gig economy companies to classify their workers as employees. “Looking at the US and what the platform companies did there, we can be sure to prepare for big lobby work to avoid what the European Commission is planning now,” says Wenckebach. ACDU’s Aslam is also bracing for how the industry will respond. “The fight hasn't finished yet,” he says.

More Great WIRED Stories📩 The latest on tech, science, and more: Get our newsletters!Amazon's dark secret: It has failed to protect your dataHumans have broken a fundamental law of the oceanWhat The Matrix got wrong about cities of the futureThe father of Web3 wants you to trust lessWhich streaming services are actually worth it?👁️ Explore AI like never before with our new database💻 Upgrade your work game with our Gear team’s favorite laptops, keyboards, typing alternatives, and noise-canceling headphones

Related Articles

Latest Articles