the European agreement on the gig economy – Corriere.it

The European Union is ready to regulate the gig economy, the economy of jobs that includes home deliveries, rental with driver and other jobs carried out under algorithms. EU governments have reached an agreement on a draft directive which will now be discussed with the European Parliament with a view to final approval. The regulation provides that in the presence of at least three of the seven identified criteria, platform workers are to be considered employees and no longer independent, with the application of all the related legal, social security and remuneration safeguards. The regulatory proposal also contains transparency and monitoring obligations for platforms regarding the use of artificial intelligence and other automated systems in the management of employment relationships.

The gig economy sector in Europe

Employment in the gig economy has increased hand in hand with the growth of companies such as Deliveroo, Uber, Glovo and JustEat which in the space of five years have almost quintupled their turnover from 3 to 14 billion. Today digital platforms employ 28.3 million people in Europe and the EU estimates that the total will rise to 43 million by 2025. Such rapid growth has ended up overwhelming regulation, or at least anticipating it. With the proposal for a directive, the EU governments aim to make up for this delay which concerns in particular the contractual framework of workers. Currently, 90% of European platform staff are self-employed who earn less than the minimum wage in one out of two cases and who are not paid for the hours spent waiting for a job (41% of total hours). However, the EU suspects that one in five workers is classified incorrectly: in other words, five million workers in the gig economy are actually employees. How to spot them?

The seven subordination criteria

The draft directive establishes seven criteria for identifying “false self-employed persons”: three are enough to activate a legal presumption of subordination which it will be up to the platform to refute. Otherwise, the worker will be considered an employee in all respects, with all the necessary protections and cost increases. Among the seven clues are the platform’s determination of maximum wage limits, the imposition of specific clothing, the supervision of work, the limitation of the ability to choose working hours and days of absence, the restriction on the possibility to refuse assignments, to build one’s own clientele or to perform services for competitors. It is not difficult to imagine that many delivery men and drivers will end up falling under the guise of this regulation, becoming employees of the platforms. With what consequences?

What changes for the platforms

The reclassification from self-employed to employees risks having a significant economic impact on the balance sheets of the gig economy. “The text voted on today does not provide the necessary legal certainty to ensure that truly self-employed workers are not forced into employment,” Uber said in a statement. The personnel expenses of the platforms are destined to rise, reducing the investment margin in marketing initiatives and probably favoring further aggregations between operators in the various markets. However, the platforms could also be tempted to pass on the increase in costs to the final consumers or to the companies that use their services. According to a survey conducted by Inapp on a sample of 40,000 companies, for example, food delivery platforms require an average commission of 18.2% from the approximately 19,000 Italian establishments that use them to collect and deliver home orders . For one out of three restaurateurs, the cost of the service via app exceeds the 20% threshold.