A bumpy road ahead for Uber (and others) as the EU gets tough with the gig economy


COVID-19 has had a negative impact on many gig economy businesses - although takeaways soared, use of ride-hailing apps plummeted during lockdowns.  But the problems for gig economy giants like Uber and Deliveroo predated the pandemic - in multiple jurisdictions, they have faced challenges to the 'self-employed' status of the individuals who supply their services.  In the UK, the Supreme Court held earlier this year that Uber drivers were workers and so entitled to receive statutory sick pay, paid holiday and the minimum wage. 

Now the EU Commission has weighed in with proposals for a Directive on gig economy workers (called 'platform workers' in the proposals) which would give those workers substantial protection under employment law.   Some key points of the proposals:

  • there will be a legal presumption of employment status if certain criteria (mostly relating to control over the individual's work) are met;
  • platform workers will have rights to information about the ways in which the platform they work for uses automated monitoring and automated decision-making, and a right to seek explanations of and challenge automated decisions; 
  • platforms must ensure that their workers can communicated with each other privately using the platform and will need to obey information and consultation requirements; 
  • platform workers will also have protection against dismissal or victimisation for exercising these rights. 

The Commission has also stated that it will bring forward proposals for platform workers to be included in collective bargaining rights (so that they have the same right to union recognition as other workers). 

The proposals are expected to be implemented in the EU in 2025.  Although they will not apply in the UK as a result of Brexit, they are still likely to affect UK businesses.  First, any such businesses operating in the EU will need to comply with these requirements.   But, more broadly, they also indicate what investors and consumers looking at ESG metrics will increasingly see as ethical and best practice requirements for platform businesses.   The requirements for transparency over the use of automated monitoring and decision-making may well have an influence beyond the gig economy -  the UK's Information Commissioner is currently updating the Employment Practices Code, its guide on handling data in the employment context, and is likely to include guidance on monitoring technology and automated decision-making.  UK employers, particularly those in the gig economy, should pay close attention. 

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