Arief Hamizan, MSc Comparative Public Policy, University of Edinburgh
The platform economy has seen tremendous growth over the past decade, especially following the rapid digitization of work and consumption during the Covid-19 pandemic. The perceived benefits of platform work – including increased labour market access, opportunities for additional income, and flexible work hours – have resulted in a labour force of over 28 million platform workers across the European Union (EU), and is expected to reach 43 million in 2025. Despite their increasing significance, long held concerns surrounding their labour rights and working conditions have yet to be sufficiently addressed.
Platform workers face distinct challenges from those under standard employment, in that they experience legal uncertainty around their employment status, possess limited social protection, and face greater challenges in establishing collective bargaining. Combined, these factors have left many platform workers vulnerable to exploitation and unable to assert claims to labour rights.
The EU Directive on Platform Work
Over the past few years, a fragmented labour regulation framework has emerged in the EU as various national courts issue differing rulings on cases between digital labour platforms and workers. In an effort to standardise labour rights, the European Commission (EC) proposed a new directive addressing three major aspects of platform work.
Firstly, the directive introduces a legal presumption of an employment relationship between a worker and a digital labour platform. This sets out to resolve the widespread misclassification of platform workers as ‘self-employed’, which effectively excludes workers from standard employment rights such as a minimum wage, paid leave, unemployment and sickness benefits, and pensions.
Secondly, the directive aims to regulate algorithmic management, criticised for entrenching power imbalances between digital platforms and workers through opaque assessments of data collected on workers. This issue would be overcome by requiring digital labour platforms to inform and consult their workers on algorithmic management decisions.
Thirdly, the directive aims to increase transparency in platform work by requiring digital labour platforms to comprehensively declare information on work performed by their workers to national labour and social protection authorities. The lack of available data on platform work has stymied attempts to improve labour protection for platform workers.
The directive represents a critical juncture for labour rights in the digital age. Regulatory gaps have existed within the platform economy for far too long, enabling many digital labour platforms to profit from exploitative labour practices and unequal risk distribution. However, will the proposal truly achieve its goals?
Will Reclassification Really Protect Workers?
At its core, the directive aims to provide access to labour rights to millions of platform workers by reclassifying self-employed workers as employees. This follows legislative developments in several EU Member States, most notably Spain’s ‘Rider Law’. However, a simple reclassification of employment status would not impact the working conditions of genuinely self-employed platform workers.
It must be noted that platform workers are not a monolith – they comprise both high and low skilled individuals, as well as both on-location and web-based work, across a wide array of industries. As such, caution must be applied with regard to a one-size-fits-all policy.
Furthermore, adopting a strict approach may only lead to further issues down the line. After Spain introduced its Rider Law, several major developments took place. Uber Eats replaced its delivery riders with agency and outsourced workers, while Glovo directly hired 2000 riders as employees – a mere sixth of its workforce – with plans to keep the rest as contractors. Deliveroo announced its exit from the country entirely. Following the law’s introduction, job opportunities for delivery riders shrunk dramatically.
The major challenge of extending labour rights might actually be enforcement, not lack of legislation. While a legal safety net is undoubtedly needed, such legislation can be rendered meaningless without the practical extension of planned assistance and a clearer focus on enforcement practices.
Data: The True Frontier
The lasting value of the directive may instead come in its approach to data transparency and algorithmic management. According to research by the International Labour Organisation, information asymmetry is a major factor of platform worker exploitation. Where digital labour platforms control data, they are significantly empowered in influencing worker behaviour against worker interests, introducing policies that favour the platform, and achieving success in arbitration disputes.
Unionisation and collective bargaining efforts could also be strengthened by mandated worker representation in decision-making. Organising platform workers is especially difficult due to the lack of identified place of work and isolated working procedures. Improving access to data and increasing worker involvement in management ensures that platform workers have a voice where they need it most.
A Step In The Right Direction
In February 2023, the EU Parliament approved the directive. Though questions still remain regarding its comprehensiveness, the directive undoubtedly charts a progressive path forward for the future of labour. This is especially necessary considering the incredible growth of the platform economy in recent times, as well as the sheer number of individuals now participating in platform work. It will soon be up to EU Member States to ensure that the socially-minded spirit of the directive is fully realised through national laws.