Blog Post

An inclusive European Union must boost gig workers’ rights

A European initiative strengthening rights for gig workers is welcome. A digitised economy should also be inclusive.

By: Date: December 7, 2021 Topic: Digital economy and innovation

Approximately 24 million people in the European Union are estimated to have provided platform services (as of 2018; the market has high growth prospects). Most of them provide low-skilled, on-location services. They tend to be young and many have an immigrant background. Platform workers are in a regulatory vacuum: platforms may exert a level of control over them comparable to that exerted by traditional employers. Yet, platform workers lack the social protection and safety nets that are basic rights for employed workers.

Platform workers have arguably proved themselves essential during the pandemic, for example by complementing public transport services or delivering goods to locked-down households. But despite this, their income fell: the pandemic led many more workers to seek a new source of earnings in the platform economy, dramatically increasing competitive pressure on platform workers.

An initiative from the European Commission in this area is thus welcome, and should prompt EU countries to better protect platform workers’ minimum rights. The Commission’s plan is expected to include binding measures (probably through a directive) to establish a presumption that, under certain conditions, platform workers should be considered employees (platforms would be able to challenge the presumption). Safeguards against ‘algorithmic manipulation’, or the use of artificial intelligence to monitor and control workers, would also be introduced.

The Commission is venturing where others have failed. In California, platforms lobbied successfully against a state law that would have forced them to hire their workers. In Europe, platforms seem to have been using the same playbook and are reported to be lobbying EU institutions heavily. Yet, if the European Commission proposes that platform workers are employees and the EU Council and Parliament stick by the proposal, the outcome will be just the opposite: platforms will have failed.

The Commission plan will address three necessities: (a) the compelling urgency to increase protection for platform workers; (b) keeping platform business viable; and (c) staying within the remit of EU competence without stepping into regulation of EU countries’ labour markets.

Plenty of evidence justifies (a). Workers often cannot challenge platforms that unilaterally change their working conditions. Platform workers may be unable to anticipate or plan their earnings. They may be required to work extra time to keep their job or ranking. They may be exposed to automated supervision and algorithmic manipulation. They often have no social insurance or right to sick leave.

Challenge (b) is the platforms’ counter-argument to (a): regulating the relationship with their workers would affect their business models, putting thousands of jobs at risk. Delivery Platforms Europe (on behalf of Bolt, Deliveroo, Delivery Hero, Uber and Wolt) funded a study estimating that up to 250,000 couriers in Europe could be displaced, if the flexible work model had to be abandoned.

Yet, these arguments seem overstated. The Delivery Platforms Europe study suffers from two fallacies: first, it is speculative. Many platform workers, responding to a survey in the study, said they would not like restrictions on their working hours, since they value flexibility. But the Commission’s initiative in itself does not mandate a reduction of flexibility. It simply concludes that the platform-worker relationship is often already structured enough to be formally recognised as a relationship between an employer and an employee. In other words: platforms would not be required to change their business models, but rather to provide the benefits and protection employees are entitled to.

The second fallacy is that this perspective overlooks the possibility that new business models will emerge, which are equally viable and efficient while protecting workers’ rights. Swedish platform Yepstr, for example, employs all its 5,500 workers under fixed-term contracts. Others could do the same, or start-ups could develop solutions that are not yet apparent.

But maintaining the viability of platforms’ business models would help address challenge (c): without EU action, platforms face a scattered framework of rules and court decisions, which significantly hamper their ability to scale up within the single market. This tends to penalise new entrants and smaller platforms, entrenching the market positions of incumbent players. Countries may thus see a social and an economic value in action at EU level: protecting workers and improving the functioning of platform markets (on 29 November, Germany, Italy, Spain, Belgium and Portugal encouraged the Commission to ban fake-self employment on platforms).

To be sure, EU policymakers have still plenty to do. Regulatory limitations on collective representation should be tackled. Measures meant to avoid algorithmic surveillance or manipulation have significant overlaps with other ongoing legislative processes, such as the Digital Markets Act and the Artificial Intelligence Act. These initiatives will thus need to be adjusted to be compatible and complementary in an organic regulatory framework. Effective enforcement will be challenging, given the complexity and novelty of the tackled issues. Yet, agreeing and implementing the Commission’s plan will be well worth the effort: a digitised economy should also be an inclusive one.

 

Recommended citation:

Mariniello, M. (2021) ‘An inclusive European Union must boost gig workers’ rights’, Bruegel Blog, 7 December

 

This blog was produced within the project ‘Future of Work and Inclusive Growth in Europe’, with the financial support of the Mastercard Center for Inclusive Growth.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

Read article More by this author
 

Podcast

Podcast

Make AI boring again

How can AI education improve workers' experience?

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: January 19, 2022
Read about event More on this topic
 

Past Event

Past Event

Productivity and the role of Global Value Chains

The 3rd MICROPROD Policy Dialogue will tackle how Global Value Chains (GVC) and productivity affect the fourth industrial revolution.

Speakers: Carlo Altomonte, Eric Bartelsman, Maria Demertzis and Margit Molnar Topic: Digital economy and innovation Date: January 18, 2022
Read article More on this topic
 

External Publication

How fast is this novel technology going to be a hit? Antecedents predicting follow-on inventions

In this paper, the authors identify novel technologies on a large-scale and map their re-use trajectories.

By: Michele Pezzoni, Reinhilde Veugelers and Fabiana Visentin Topic: Digital economy and innovation Date: December 22, 2021
Read article
 

Blog Post

European governanceInclusive growth

12 Charts for 21

A selection of charts from Bruegel’s weekly newsletter, analysis of the year and what it meant for the economy in Europe and the world.

By: Hèctor Badenes, Henry Naylor, Giuseppe Porcaro and Yuyun Zhan Topic: Banking and capital markets, Digital economy and innovation, European governance, Global economy and trade, Green economy, Inclusive growth, Macroeconomic policy Date: December 21, 2021
Read article Download PDF More on this topic
 

Working Paper

Market power and artificial intelligence work on online labour markets

In this working paper, the authors investigate three alternative but complementary indicators of market power on one of the largest online labour markets (OLMs) in Europe.

By: Néstor Duch-Brown, Estrella Gomez-Herrera, Frank Mueller-Langer and Songül Tolan Topic: Digital economy and innovation Date: December 16, 2021
Read article
 

Blog Post

Inclusive growth

Which platforms will be caught by the Digital Markets Act? The ‘gatekeeper’ dilemma

The scope of the Digital Markets Act has emerged as one of the most contentious issues in the regulatory discussion. Here, we assess which companies could potentially be considered ‘gatekeepers’.

By: Mario Mariniello and Catarina Martins Topic: Digital economy and innovation, Inclusive growth Date: December 14, 2021
Read article Download PDF More on this topic More by this author
 

Working Paper

mRNA vaccines: a lucky shot?

How can the background of mRNA technology development help us understand how public vaccine research and development policy can be improved to generate the full global social benefits from breakthrough novel vaccine technologies?

By: Reinhilde Veugelers Topic: Digital economy and innovation Date: December 13, 2021
Read about event More on this topic
 

Past Event

Past Event

How to deal with small banks: consolidation, tailoring and the fintech challenge

Small banks face multiple challenges. What structural changes are needed to tackle these pressures?

Speakers: Alexander Lehmann, Nicolas Véron, Xavier Vives, Anne Fröhling and Philip Evans Topic: Banking and capital markets Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 9, 2021
Read about event
 

Past Event

Past Event

Future of work and inclusive growth: Digital dialogues

An end of year series of digital discussions on the Future of Work and Inclusive Growth in Europe.

Speakers: Janine Berg, Arturo Franco, Stijn Broecke, Esther Lynch, Mario Mariniello, Laura Nurski, Leah Ruppanner, Nicolas Schmit, Kim Van Sparrentak and Tilman Tacke Topic: Digital economy and innovation, Inclusive growth Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 7, 2021
Read article
 

Blog Post

Inclusive growth

The triple constraint on artificial-intelligence advancement in Europe

Skills, data and financing shortcomings constrain artificial-intelligence innovation in Europe.

By: Mia Hoffmann and Laura Nurski Topic: Digital economy and innovation, Inclusive growth Date: December 6, 2021
Read article More on this topic
 

External Publication

'In Situ' Data Rights

Privacy empowers individuals to control what is gathered and who sees it; portability permits analysis and creates competition. By moving our data to portals that would share more value in return, we might capture more of our data value. After all, that data concerns us.

By: Bertin Martens, Geoffrey Parker, Georgios Petropoulos and Marshall Van Alstyne Topic: Digital economy and innovation Date: December 1, 2021
Read article More by this author
 

Podcast

Podcast

Technology: a product of unequal power?

The effects of digital technology on work and wages.

By: The Sound of Economics Topic: Digital economy and innovation, Inclusive growth Date: November 24, 2021
Load more posts