February 15, 2021

Uber urges European policymakers to implement work reforms

Uber urges European policymakers to implement work reforms

Uber has asked the EU to implement reforms in order to protect drivers and couriers, ones akin to Prop 22, which was approved in California. In the US, the model classified workers as “independent contractors” but still allowed certain benefits such as minimum earnings and vehicle insurance. The ride-hailing app which was first launched in San Francisco presented a “white paper” to the EU’s competition chief Margrethe Vestager and jobs commissioner Nicolas Schmit, among other officials, ahead of the European Commission’s review on February 24, which will discuss the regulation of gig economy platforms.

IZA World of Labor author Paul Oyer writes that policymakers around the world are finding that it’s important to adapt to the growth of the gig economy. In his article, he notes that: “[m]any Uber drivers work the equivalent of a full-time job while others work a few hours here and there. Drivers leave the platform for weeks at a time and then reappear.” Therefore “crafting regulations that treat fully committed and occasional gig workers as one group is unlikely to be an efficient solution.” Oyer notes that as the gig economy develops policy changes will become necessary in order to ensure portability of benefits as well as a level of protection against exploitation.

This has been a complicated issue for companies, like Uber, who have played a big role in the growth of the gig economy. In a blog post Uber CEO Dara Khosrowshahi said that: “We’re calling on policymakers, other platforms and social representatives to move quickly to build a framework for flexible earning opportunities, with industry-wide standards that all platform companies must provide for independent workers.” Khosrowshahi added that this could either be done through creating new laws such as the ones that were approved in California or by setting new principles through a “European model of social dialogue” between those who work on the platforms, policymakers, and industry spokespeople.

Many independent workers opt in for short-term gigs because they value the flexibility and others choose gig work because they haven’t found a traditional job that has met their criteria. On the other hand, Uber has warned that if the company is to treat its drivers as employees, they will be forced to increase their costs and those would be passed to their customers. Thus, the ride-hailing app envisions that the gig economy workers should be offered a level of protection whilst still honoring the flexibility of contract work.

As Oyer notes: “Understanding the preferences of workers and firms for flexible and short-term work arrangements is important both for planning purposes and for policy. Proper planning can lead to gig work that provides flexibility to those who value it highly while also providing an “alternative safety net” to people looking for their next traditional job.”

Read Paul Oyer’s article The gig economy.