Will gig-platform workers get labor rights?

In the last ten years, we have seen new business models challenging traditional regulated industries by facilitating work for self-employed "partners" and using an evasive strategy towards existing regulations and institutions. These Gig-platforms distribute work to a digitally connected and often physically scattered "workforce" and use AI and algorithms to manage work allocation, pricing, and quality measurements. These Gig-Platforms have been described as one of the most significant economic disruptions of the past decade and challenge the "future of work" business models.

Giving regulated industries an exogenous shock

Prominent examples such as Uber, which facilitates transportation services, or Wolt, which facilitates food delivery, all enter the market as an exogenous shock following a similar pattern; They launch an app-based business model, sidestepping market regulations around social and labor rights, giving them a competitive advantage, sometimes a temporary monopoly. Moreover, by avoiding labor regulations and challenging the current regulated market, they get attention and support among non-conservative consumers and even mobilize these consumers against the legislators to gain regulatory accommodation and regulatory arbitrage—a proper disruptive market entry strategy.

Protected by Antitrust laws

Gig-platforms often define themselves as 'digital intermediaries' instead of employers with managerial control. They are thereby not legally bound to fulfill (costly) employer responsibilities such as safeguarding health and safety measures, sick pay, holiday pay, insurance, or social security contributions. Critics say this is 'bogus self-employment,' a practice common in the global food delivery sector which has detrimental effects on the protection of riders' social and labor rights. 

Because of their self-employed status, improving working conditions through a collective bargaining agreement remains virtually impossible at some platform companies, such as Wolt and Hungry. DK. This is partly due to EU antitrust legislation: self-employed riders are considered 'undertakings'; therefore, agreements on 'prices' (wages) among self-employed riders could be cartel-like behavior 'distorting' market competition.

An unprotected gig-workforce

If we look at food delivery riders, they face occupation-specific risks, which represent a common denominator in the gig-platform industry.

1. Income insecurity due to performance-based earnings- and bonus systems leading to low and often volatile incomes;

2. Low job mobility due to little or no access to training and career development, keeping riders in a 'dead-end job.'

3. High risk of exposure to traffic accidents due to performance pressure, where their earnings often are tied to the speed of deliveries, using non-human (algorithmic) management and control.

4. Difficult to establish bodies for worker representation and unionization. Due to the lack of a shared workplace, and high turnover, foreign riders lack knowledge and practice with local unions and labor laws.

5. Since the lion's share of the riders are side-job riders, the full-time riders are the minority and have the highest interest in a better security net.

Workers on gig-platforms show low collective bargaining capabilities, but we may have witnessed a vital watershed to protect labor rights on gig- platforms. A new EU directive drafted in December 2021 aims to improve working conditions on gig-platforms, including a 'rebuttable presumption of employment that would guarantee riders default employment status unless disproved by the company in question. 

The EU directive addresses these essential areas:

1. Employment status - The proposed Directive seeks to ensure that people working through digital labor platforms are granted the legal employment status corresponding to their work arrangements.

2. Algorithmic management - The Directive increases transparency in using algorithms by digital labor platforms, ensures human monitoring of their respect of working conditions, and gives the right to contest automated decisions.

3. Enforcement, transparency, and traceability - bring more clarity around platforms by clarifying existing obligations to declare work to national authorities and asking platforms to make key information about their activities and the people who work through them available to federal authorities.

This might mean the end of 'food delivery as usual' - unless these companies find a new evasive strategy for blocking the EU's initiatives.