Europe Seeks to Improve Gig Work Conditions

EU Launches Consultation on Gig Economy Worker Rights

The European Union has initiated the first phase of discussions with gig platforms and the workers they employ.

Lawmakers across the region have expressed a desire to enhance working conditions for individuals providing services through these platforms. EU digital policy chief, Margrethe Vestager, acknowledged in a recent address that current conditions can be “poor” and “precarious”.

Seeking a Balance

However, Vestager emphasized the Commission’s objective is to establish a “balance” between the challenges of platform work and the provision of secure, rights-protected employment.

A key challenge lies in reconciling the need for platforms to remain viable – often dependent on minimizing employment costs – with ensuring fair labor practices for the individuals who deliver their services.

The Commission’s consultation process aims to address this complex issue by bringing both sides together to define what constitutes ‘better’ platform work.

The Platform Economy's Future

Vestager stated, “The platform economy is here to stay — new technologies, new sources of knowledge, new forms of work will shape the world in the years ahead.”

She underscored the importance of maintaining existing rights and the social safety net for platform workers, stating that new opportunities should not come at the expense of fundamental protections: “Online just as offline, all people should be protected and allowed to work safely and with dignity.”

The goal is to find a balance between maximizing the benefits of the platform economy and ensuring social rights are equivalent to those in traditional employment. This also involves fostering fair competition between platforms and companies adhering to traditional labor laws.

Two-Stage Consultation Process

The Commission’s consultation unfolds in two stages. The first involves discussions with “social partners” to assess the need for and direction of potential EU action to improve working conditions in platform work.

This initial phase, lasting at least six weeks, will facilitate dialogue between platforms and workers (or their representatives) to reach a consensus on improvements. The outcome could either guide Commission initiatives or lead to self-regulation by the parties involved.

Content of the Initiative

The second phase, planned before the summer, will focus on “the content of the initiative” – determining the specific measures the EU will propose to address the challenges.

Alongside the social stakeholder discussions, a parallel consultation will address competition concerns. Platforms currently operate under different rules than traditional employers, potentially creating an unfair advantage.

Vestager noted that this consultation will ensure EU competition rules “do not stand in the way of collective bargaining for those who need it”.

Potential for Compromise

Some observers anticipate a compromise solution that offers the appearance of addressing platform rights gaps without fundamentally disrupting the platform economy.

Uber, for example, has actively lobbied for deregulation, seeking a “Prop-22 style” outcome in Europe, similar to the carve-out it secured from employment laws in California.

Other platforms are expected to propose similar changes to align the social contract with their business models.

Recent UK Supreme Court Ruling

The start of the EU consultation follows a recent landmark ruling by the UK’s Supreme Court. The court dismissed Uber’s appeal in a long-running employment tribunal case.

The judges affirmed that drivers who sued Uber had been incorrectly classified as ‘self-employed’, making Uber liable for compensation for the rights they were denied.

This ruling raises the stakes for the EU, as offering lower employment rights to platform workers than those available in the post-Brexit UK could be politically problematic.

Addressing an Imbalance

While achieving a true ‘balance’ may be unrealistic given the inherent imbalances in business models that rely on circumventing employment regulations, the Commission believes a consultation process and a network of EU regulations can mitigate the worst excesses of the gig economy.

The Commission acknowledges the rapid growth of platform work across various sectors, framing it as a technological advancement that should not be hindered.

Perceived Positives and Challenges

“It can offer increased flexibility, job opportunities and additional revenue, including for people who might find it more difficult to enter the traditional labour market,” the Commission stated, highlighting the potential benefits.

However, the Commission also recognizes the precarious working conditions often associated with platform work, including a lack of transparency, unpredictable contracts, health and safety concerns, and insufficient social protection. Algorithmic management and the cross-border nature of platform work also present challenges.

Impact of the Pandemic

The coronavirus pandemic accelerated the adoption of platform work while simultaneously increasing concerns about the vulnerability of gig workers. Many were forced to choose between earning income and risking their health due to a lack of sick pay.

Scale of Platform Work

The Commission estimates that around 11% of the EU workforce (approximately 24 million people) have provided services through a platform.

Vestager noted that most individuals use platform work as a secondary income source, but around three million rely on it as their primary job.

The potential cost of extending full employment benefits to these three million workers is a significant consideration for platforms.

Future Growth and Regulation

Vestager cited a recent study indicating that 35% to 55% of consumers intend to continue requesting home delivery more frequently.

“We… see that the platform economy is growing rapidly,” she added. “Worldwide, the online labour platform market has grown by 30% over a period of 2 years. This growth is expected to continue and the number of people working through platforms is expected to become more significant in the years ahead.”

European Values and Digital Regulations

“European values are at the heart of our work to shape Europe’s digital future,” Vestager stated, referencing the EU’s pipeline of digital regulations.

“Our proposals from December for a Digital Services Act and a Digital Markets Act are meant to protect us as consumers if technology poses a risk to fundamental rights,” she said. “In April we will follow up on our white paper on Artificial Intelligence from last year and our upcoming proposal will also have the aim to protect us as citizens. The fairness aspect and the integration of European values will also be a driver for our upcoming proposal on a digital tax that we plan to present before summer.”

“All these initiatives are part of our ambition to balance the great potential that the digital transformation holds for our societies and economies.”