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EU targets Uber and Deliveroo model with workers’ rights plan

  • The proposal is the latest EU move to regulate tech companies
  • Rules could apply to more than 4 million gig economy workers
  • Couriers would be entitled to minimum wage, paid holidays, pensions
  • Just East Takeaway.com boss welcomes move
  • Other delivery platforms warn it could lead to job losses

BRUSSELS, Dec 9 (Reuters) – The European Commission announced on Thursday draft rules to grant many drivers of online companies such as Uber (UBER.N) and Deliveroo (ROO.L) social benefits, a decision that unions say is late, but some companies say will lead to job losses.

The proposal, a world first that must be debated with EU countries and lawmakers before becoming law, marks the European Union’s latest attempt to regulate tech companies and ensure a level playing field between online and traditional businesses.

“No one is trying to kill, stop or hinder the development of the platform economy,” Employment and Social Rights Commissioner Nicholas Schmit said at a press conference presenting the proposals.

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However, the rules are necessary to ensure that new business models comply with labor laws, he said.

The EU executive said the draft rules could apply to around 4.1 million of the 28 million workers on online platforms in the 27-nation bloc.

Internet companies that set salaries and standards of conduct for their couriers would have to classify them as employees entitled to minimum wages, paid holidays and pension rights, according to the draft rules.

Online food ordering and delivery companies, which are typically loss-making in an industry seen as ripe for consolidation, have taken legal action in Europe and the US to classify passengers and drivers as contractors independent, rather than as employees – with mixed results.

MIXED REACTIONS

Reactions to the EU plan have varied, with CEO Jitse Groen of Europe’s biggest food delivery company Just Eat Takeaway.com, which also owns Grubhub in the US, saying he welcomes them. .

However, Delivery Platforms Europe, a lobby group that includes Uber, Deliveroo, Glovo and Delivery Hero, said in a statement that what part-time drivers wanted most was flexibility over their working hours. work and that the proposed rules would lead to job losses. .

The Uber Technologies logo is seen on a vehicle in Manhattan, New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly

Petra Bolster of Dutch union FNV, which has won lawsuits against Deliveroo and Uber over employment, noted the proposal included a list of five tests to help determine when couriers were self-employed.

“It’s naïve because platforms will use it as a toolkit to circumvent the criteria and get away with everything,” she said. “It’s their whole profit model to avoid employment costs.”

According to the EU proposal, companies will be considered employers if they monitor workers’ performance by electronic means, restrict their ability to choose their working hours or tasks and prevent them from working for third parties.

Basically, the proposal shifts the burden of proof to businesses when a dispute arises as to whether a worker is an independent contractor or an employee.

SELF-CONTAINED “FICTION”

Leonid Popa, a Russian immigrant who was an Uber driver in the Netherlands for four years, said the idea he was self-employed was a “fiction” but found himself out of work and forced to apply government assistance when the COVID-19 pandemic hit.

“The whole story was nonsense. There was no flexibility, you don’t earn much, you have to work over 40 hours to earn your basic living and there’s really no sense of security,” he said. he said, adding that he hoped for better. regulation would help his former colleagues.

Jefferies analyst Giles Thorne said the EU proposal would not destroy online ordering and delivery models, which were here to stay, but would give couriers a bit more power.

For consumers, the long-term result of EU worker protections would likely be a slight increase in prices or delivery costs.

But “I’d bet my bottom dollar that people would still order bento boxes online,” Thorne said.

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Reporting by Foo Yun Chee, Toby Sterling, Supantha Mukherjee, Nadine Schimroszik; edited by Philip Blenkinsop, Bernadette Baum and Alex Richardson

Our standards: The Thomson Reuters Trust Principles.

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