Ride-hailing and food delivery: MEPs get ready to battle over platform workers rules

Conservative MEPs from the European People’s Party (EPP) are preparing a counter-offensive against the socialist S&D’s push for tight employment protection for platform workers, joining forces with industry.

In December, the European Commission proposed a directive to improve platform workers’ working conditions, the first legislative attempt to regulate a growing but still untouched market. The EU executive estimated that 28 million people are currently working in the gig economy in Europe, a figure set to reach 43 million by 2025.

Centre-left lawmaker Elisabetta Gualmini, a rapporteur on the proposed law, has significantly expanded provisions for platform workers to ask for employee status.

Elisabetta Gualmini (S&D)

At the heart of the Commission’s proposal is the so-called rebuttable presumption of employment, which means platform workers automatically classify as employees unless the platform proved otherwise.  Platforms will have to declare their workers’ contracts with the relevant social security body.

In case the declared contracts are for independent status, the social security body will have to verify them against the presumption of employment. Labour inspectors will also have to double-check the nature of the working relationship when carrying out their checks.

But EPP MEP Miriam Lexmann says the EC proposal erases self-employment and freelancers from this kind of market, even excluding the possibility for platform workers to opt out.

Miriam Lexmann (EPP)

Leading ride-hailing companies like Bolt and Uber claim the Commission’s proposal to set up a “rebuttable presumption of employment” will lead to thousands in jobs losses.

The EC plans to make such platform companies forced to employ the drivers, but ride-hailing lobby Move EU claims this would lead to a decrease in 40% of drivers if they have to move to a model that consolidates working hours, since fewer workers would be needed to optimise task allocation.

“That would lead to hundreds of thousands of job losses in the ride-hailing industry as a whole. In addition, employed drivers would be paid in line with market standards in similar industries – close to the minimum wage – as opposed to earning revenues consistently higher than the local minimum wage,” Move EU claims.

European trade unions however accuse the platform companies of trying to “trick workers” out of choosing an employment contract, by dangling before them a rotten carrot in the form of private insurance.

The chief gripe on platform workers is that by not being directly employed by the platform companies, they are technically self-employed workers. But unions, including Malta’s own General Workers Union, say this classification is false, and that such platform workers do not qualify for sick pay, paid holiday or parental leave.

“Having failed to stop the directive despite spending millions on lobbying, platforms are now trying to circumvent the directive by convincing workers not to take up their rights,” the European Trade Union Confederation said.

Major platforms are now teaming up with private insurance firms to offer workers what they say is the “safety net” they have been campaigning for.

But trade unions insist that private insurance cannot be compared with a state social security system, which follows the worker from one job to another and offers a safety net in case of unemployment.

“Private insurance makes workers more dependent on platforms because they would lose access to social benefits if they left their job, unlike someone who has had an employment contract,” ETUC said.

The trade union confederation says platforms have successfully lobbied the European Commission to ensure the proposed law includes a dispensation for private insurance, such that if this is offered by a company to a worker, it will not be seen as indicating the existence of an employment relationship.

“Having lost the argument on the platform work directive, companies have now resorted to trying to trick their workers not to take up their rights offered by the directive,” ETUC Confederal Secretary Ludovic Voet said. “They are treating their own workers like idiots. But drivers, riders and carers can see through this tactic and will keep fighting for their legal rights.

“The private insurance that platforms are offering workers falls far short of the rights a worker would receive with an employment contract. It’s not a safety net if it’s full of holes.”

The platform companies insist that the vast majority of ride-hailing drivers do not want to be employed.

“This is not what they are asking for. Surveys across Europe demonstrate that they enjoy the flexibility and enhanced revenues allowed by self-employment and by being able to work for multiple platforms simultaneously,” Move EU said.

The platforms say directly employing workers would ultimately “reduce their existing pay” – that is, reduced earnings by having to pay them a wage. To these companies, employing their drivers strikes right at the heart of the ‘flexibility’ they enjoy – that is, profit sharing rather than paying wages, or incurring the costs of employment.

“Platform workers such as drivers enjoy the typical characteristics of being self-employed,” Move EU said. “They are free to connect and disconnect from the platforms, they unilaterally decide on their work schedule, they can accept or decline work offers and can work on multiple platforms while maintaining their own business at the same time.”

The lobby also insists this liberty has earned ride-hailing drivers gross earnings that are above the minimum wage, even though they remain responsible for the upkeep of their cars as well as buying access to the platform.

“Ride-hailing platforms are ready to assess what can be done to improve the working conditions and benefits for drivers, provided that there is legal certainty around the independent status of drivers. We believe that a clear framework that allows platforms to offer more to drivers, without increasing the risk of reclassification, can unlock features that could include better access to social protection, access to representation, lifelong learning, saving plans and more clarity on how platforms’ algorithms work.”