MEPs demand EU strategy to protect gig economy workers

Deliveroo cyclists have spread throughout European capitals delivering food orders. [Jon Crel/Flickr]

The European Parliament is expected to adopt a draft report on Thursday (15 June) calling on EU and national authorities to ensure “fair working conditions and adequate legal and social protection for all workers” in the growing collaborative economy.

The draft text also regrets that last year’s European Commission guidelines on the gig economy — which is based on short-term contracts and digital transactions — did not bring “sufficient clarity” about how to apply EU legislation to this nascent field.

The draft document tells member states to “provide legal clarity” and to regulate start-ups built on this model  “in a way that is facilitating and enabling rather than restrictive”.

EU makes progress on uniform sharing economy policy

The European Commission will ask member states to review and amend legislation, when necessary, to end the fragmentation faced by Uber, Airbnb and other collaborative platforms in Europe, EURACTIV.com has learned.

“We need to push forward a common strategy – at EU level – capable of keeping together a fair labor market and a shared set of legal and social security principles,” the rapporteur, Italian Partito Democratic lawmaker Nicola Danti (S&D), told EURACTIV.com.

The collaborative economy, also known as the sharing economy, is based on peer-to-peer transactions, mainly powered by digital platforms.

Gross revenue in the EU from sharing businesses was estimated at €28 billion in 2015. The Commission believes that it could add as much as €160-572 billion to the bloc’s economy over the coming years.

Europe has struggled to deal with the rise of these new players, who have disrupted traditional sectors such as hospitality and transport, regulated in many cases by local rules.

The MEPs voiced “deep concern” about the legal maze the new companies face across Europe because of its impact on their development and on consumer protection.

Accordingly, the draft report stresses the need to “remove hurdles, duplication and fragmentation that hinders cross-border development”.

EU court's opinion challenges Commission's pro-Uber stance

An opinion issued today (11 May) by the EU Court of Justice’s advocate general said that Uber cannot benefit from lax rules under the service directive, seen by the European Commission as the legal basis for the collaborative economy.

Progress on liability

On the issue of liability of sharing platforms, the executive is willing to go further.

In this regard, MEPs urged further clarity “as quickly as possible” to promote “responsible behaviour, transparency, legal certainty and thereby increase user confidence”.

'Sharing economy' turns to insurers for risk protection

The success of sharing economy firms offers new opportunities to insurers who see Uber drivers and Airbnb flat owners as a potential source of revenue. But setting up a safe environment for digital platforms, contractors, and users remains a challenge.

“We demand an ambitious European strategy which would pave the way for a harmonised and dynamic ‘ecosystem’ consisting of specific rules and general principles, capable of avoiding the fragmentation of the Single Market,” Danti said.

By the end of this year, the Juncker Commission is expected to publish its new guidelines on liability rules and support for platforms when they adopt voluntary measures to remove illegal content.

A study published by the Commission on Monday (12 June) showed that 55% of Europeans have had at least one problem with collaborative economy firms. Six in ten consumers could not say who was responsible in cases of wrongdoing and did not know about a platform’s responsibility or whether they had a right to demand compensation.

Danti explained that collaborative platforms could enhance transparency in rating and reviews mechanisms, establish reliable reputation criteria, introduce guarantees and insurance, and develop secure payment systems.

Precarious jobs

The draft report takes a positive view on the sharing economy as “it plays an important role in making the economic system not only more efficient but also socially and environmentally sustainable, allowing for a better allocation of resources and assets that are otherwise under-used”.

But the MEPs are concerned about the “precarious situation” of drivers or cyclists delivering food, as they remain largely unprotected and deprived of some of their rights.

The draft report acknowledged that this booming business model offers flexible ways for young people and marginalised groups to enter the labour market. But it stressed that flexible new forms of employment should be balanced with economic and social security for workers.

The MEPs stressed the “paramount importance” of safeguarding workers’ rights in the gig economy, especially the rights to launch industrial action or collective bargaining.

The text also emphasises that workers have to be classified as employees or self-employees “based on the primacy of facts”.

Sharing economy firms, including Uber, label their workers as self-employed to avoid social protection costs.

But in a landmark case, a UK court ruled last October that the San Francisco-based startup should consider its drivers as full-fledged employees, guaranteeing them the national living wage and holiday pay.

However, officials acknowledged it was difficult to make progress on protecting the rights of gig workers as most of the competencies remain with member states.

The EU executive is considering broadening the scope of some existing laws to guarantee “effective worker protection” in the digital age.

The Commission aims to propose a revision of the written statement directive by the end of this year to extend what this directive covers.

App economy jobs come under Commission scrutiny

The European Commission will change an EU law on employment contracts by the end of the year in a move to create standards for precarious jobs created by online apps like Uber and Deliveroo.

Basic rights

The directive relates only to information rather than to standards governing the content of a contractual relationship. However the executive is considering a deep review to amend its objectives, in order to incorporate a set of minimum rights for workers in the contracts.

Basic labour rights identified by the executive include the maximum duration of probation, a contract with a minimum of hours, training, a reasonable notice period in case of dismissal, and access to effective and impartial dispute resolution in the event of dismissal or unfair treatment.

The Juncker Commission is also consulting social partners to widen the access to social protections, given that it does not fully account for self-employment and non-standard employment.

The aim is to explore ways to ensure that every worker has access to social protections on the basis of their contributions, EU officials explained.

Further Reading

Supporter

Zurich