After years of public outcry and court cases, the EU on Thursday presented its plans to regulate platforms like Uber and Deliveroo, which may grant employment rights for the up to 4.1 million gig workers who rely on them.
The move, a world first, once again sets the EU apart from the U.S on tech regulation. Top EU executives said when unveiling the plan that it aims to give the self-employed workers using these platforms the same rights as those employed by other means.
“People are the heart of this business model. They deserve the same protection and conditions as any other worker in any EU country,” said Executive Vice President Valdis Dombrovskis, while Jobs Commissioner Nicolas Schmit added that “no one is trying to kill, stop or hamper the growth of platform economy” — but “this business model should also fit with our standards.”
For platforms, the plans should bring legal certainty. The EU felt it was necessary to act because of court cases around the bloc with sometimes contradictory outcomes on the employment status of platform workers.
Unions and lawmakers applauded the EU’s move, while platforms expressed their concerns about the specifics. The new plans won’t kick in for several years and key parts of the rules will still be handled on the national level, exposing the rules to new outcry and court cases. Here’s everything you need to know.
1. What’s in the new rules?
The EU presumes gig workers are employees if the platform “controls the performance” of their work. The Commission listed five criteria to determine if that’s the case, of which at least two have to be fulfilled. The criteria have to do with the control or supervision a platform exerts over prices, appearance or conduct, quality of work, working hours and the ability to work for other clients. The criteria don’t come out of thin air — they are based on court rulings on job status around the bloc, EU officials have said.
EU states will have to transpose the criteria into national lawbooks. That doesn’t mean administrative procedures or court cases focused on the status of platform workers won’t happen again. But while drivers and couriers have until now gone to court themselves to claim employment rights, the new rules place the onus on platforms to argue in courts why a platform worker should not deserve employment rights.
2. Who exactly will be affected?
Of the 28 million platform workers currently active in Europe, 5.5 million are at risk of being wrongly classified as self-employed, according to the Commission. Between 1.7 and 4.2 million are expected to be reclassified as workers, according to an impact assessment carried out by the Commission. Workers who are reclassified stand to gain all kinds of benefits, including minimum wage earnings where applicable. The aggregate boost in earnings for platform workers earning less than the minimum wage could be as much as €484 million per year. For platforms, the bill might be €4.5 billion per year.
But the picture may well turn out to be quite different when the rules finally apply. The rules still have to be negotiated by Parliament and the Council, and once that is done EU states have two years to transpose.
The EU has set a deadline of 2025 for the rules to be written into national lawbooks — a long time for the fast-moving gig economy business. By then, the EU expects the number of gig workers will have grown to 43 million. The rules are also minimum standards, which means EU states can go beyond them. Platforms can also tweak their models.
3. Could this be watered down?
There is a strong chance, yes.
The rules are a win for lawmakers in the European Parliament, who in September filed a report advocating for the same principles as the Commission eventually adopted: That an employment relationship between platform and worker is presumed, and that it’s up to the platforms to prove that it doesn’t exist.
The devil, however, might be in the details. “By connecting criteria to it, I’m afraid a lot of platform workers will be out of the scope,” Greens lawmaker Kim Van Sparrentak told POLITICO. On the side of the Council, five countries — Germany, Spain, Portugal, Belgium and Italy — spoke up ahead of the Commission initiative, calling for a ban on “fake self-employment.” France, however, signaled that it’s not in favor of platform workers being reclassified as employees, and Paris holds the rotating Council presidency in the first half of next year.
4. Are the platforms freaking out?
Sort of. Both ride-hailing and food delivery platforms rallied against reclassification leading up to the Commission’s initiative by setting up new lobby groups and commissioning studies claiming reclassification would cost hundreds of thousands of jobs. They also regularly referred to Spain, which introduced its own Rider Law this past summer, as an example of what to avoid. One food delivery platform — Deliveroo — left the Spanish market altogether, while others tweaked their models.
In statements after the release, the lobby groups and companies expressed their disappointment. Uber said it was “concerned” that the Commission would put “thousands of jobs at risk.” Move EU, a ride-hailing lobby group, took aim at the criteria, saying “some of these are inherent to industries such as ride-hailing.” Delivery Platforms Europe, the lobby group of food delivery platforms, said it was “concerned” about the impact.
Unions, however, were all cheers. “Uber, Deliveroo and Amazon — your free ride at workers’ expense is over,” ETUC, a group representing platform workers, said.
5. Is this the end of the gig economy?
A key question eliciting different answers, depending on who you ask. According to EU officials, their intention is not to “kill” the gig economy but to make it fairer.
Platforms have cried out about risks to their business models stemming from the legislation, but it will be a while before the rules are effective — and in the meantime, platforms might find ways of living with them. The CEO of Wolt, a Finnish delivery platform, told POLITICO his company could most likely cope with a shift toward employed status for its workers, even if this meant higher prices for consumers.
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