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EU regulators have agreed to landmark rules that will force ride-sharing and delivery companies, such as Uber and Deliveroo, to improve employment conditions for workers on their platforms.
The rules laid out five criteria, of which gig economy platforms must meet at least two. If for example a company determines a worker’s hours and pay, then that person is to be treated as an employee, said legislators on Wednesday.
Nicolas Schmit, the EU’s commissioner for jobs and social rights, on Wednesday hailed the agreement as a “historic achievement”. The deal follows years of discussions in Brussels on improving social and labour conditions for gig economy workers.
“The new rules we have agreed ensure platform workers, such as drivers and riders, receive the social and labour rights they are entitled to, without sacrificing the flexibility of the platform business model,” said Schmit.
“Platforms will have legal certainty throughout the EU for the first time,” he added. “And consumers will continue to enjoy access to platform services at their fingertips. Workers will also understand better how automated decisions are taken.”
Gig economy companies however are likely to resist the move by Brussels because they envisage being saddled with higher costs, such as extra payments for paternity leave and healthcare. The European Commission estimated the regulations would push up prices for services from companies such as Uber and Bolt by 40 per cent.
Uber and other companies in the sector have said customers, as well as facing higher prices, could experience a lower quality of service. The extra burden could force Uber to stop its services in smaller cities, the company has said.
Online platforms have said that their workers like the flexibility that they offer because it allows them to seek work elsewhere and manage their own working hours.
“The European parliament and the council presidency, in a rush to close a deal by the end of the year, want to force hundreds of thousands of genuinely self-employed drivers into employment status, contrary to what ride-hailing drivers have repeatedly said they want,” said Move EU, the European association of ride-hailing platforms that represents companies such as Bolt and Uber.
“The member states will now need to look at the text and decide if they want to approve a provisional agreement very likely to create significant legal uncertainty throughout the EU,” added MoveEU chair Aurélien Pozzana.
Member states and the European parliament still need to ratify the provisional deal.
Platforms can appeal if they can prove that the contractual relationship is “not an employment relationship”, said the legislators in Brussels.
The laws, agreed by member states, the commission and the parliament, ban platforms from dismissing employees using algorithms.
“Platforms will be prohibited from taking certain important decisions, such as dismissals and decisions to suspend an account, without human oversight,” said the European parliament in a statement. “The text also ensures more human oversight on the decisions of systems that directly affect the persons performing platform work.”