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World NewsUber, Deliveroo and gig economy face strict new rules in Europe

Uber, Deliveroo and gig economy face strict new rules in Europe

A driver makes use of the Uber app to drop off a passenger in London.

Chris J. Ratcliffe | Bloomberg by way of Getty Images

Legislators in Europe have proposed powerful new rules for gig economy corporations resembling Uber and Amazon-backed Deliveroo.

The proposals — revealed Thursday by the European Commission, the manager arm of the EU — are a significant step towards requiring gig economy corporations to categorise drivers, couriers, cleaners, health coaches, masseuses and different employees who use apps and on-line platforms to seek out work as staff.

Employee standing entitles employees to a minimal wage, vacation pay, unemployment and well being advantages, and different authorized protections relying on the nation the place they labored.

The proposals, which have been welcomed by labor unions, may have an effect on an estimated 4.1 million gig economy employees throughout Europe. They should undergo a number of legislative steps earlier than they turn into legislation. 

Gig economy corporations have lengthy categorised their employees as unbiased contractors, permitting them to reduce their expenditures and constrain authorized liabilities.

Working for these corporations appeals to those that do not need to get a everlasting 9 to five job and the platforms have made issues like transferring round and ordering meals simpler for shoppers.

But the Covid-19 pandemic has confirmed how fragile these platforms could be. Work shortly dried up for Uber drivers throughout lockdowns, forcing a lot of them to seek out new jobs elsewhere, typically with higher protections in place.

Unsurprisingly, Uber and different gig economy corporations are towards the fee’s reforms, which may severely impression their enterprise fashions. The new rules may consequence in billions of {dollars} in new prices for them.

The ride-hailing big stated prices can be handed onto shoppers and roughly 250,000 couriers and 135,000 drivers throughout Europe would lose work beneath the proposed rules.

“Uber is committed to improving the working conditions for the hundreds of thousands of drivers and couriers who rely on our app for flexible work,” an Uber spokesperson stated in an announcement shared with CNBC.

“We have worked with national governments across Europe and the rest of our industry on ways to strengthen platform work without risking the flexibility independent workers say they want.”

“But we are concerned the Commission’s proposal would have the opposite effect — putting thousands of jobs at risk, crippling small businesses in the wake of the pandemic and damaging vital services that consumers across Europe rely on.”

However, Just Eat is in favor of the reforms. Jitse Groen, the corporate’s CEO, said on Twitter that Just Eat helps the “proposals to improve conditions for workers and help them access social protections.”

Certain nations have already launched their very own gig economy legal guidelines however the laws proposed by the European Commission is essentially the most extensively relevant legislative try.

The EU estimates that the variety of folks working for digital platforms throughout the bloc will develop from 28 million as we speak to 43 million by 2025.

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