A Victory for the Left and Trade Unions

The directive, announced on Thursday, is by no means perfect. Compared to the version proposed last November by Leïla Chaibi — a member of the EU parliament for France Insoumise and leader of the campaign for this directive — the commission’s proposal contains significant omissions. As academics and trade unionists have pointed out, it has nothing to say about the trend of platforms using subcontractors to dodge their responsibilities, and nor is it clear enough about the rights of all platform workers to collective bargaining.

Nonetheless, most of the key demands from the Left and trade unions have been met by this directive. As Livia Spera of the European Transport Federation said following the announcement, “In the last decade, it is probably one of the few EU Commission proposals that has listened to what trade unions have said.”

Most importantly, the commission states unequivocally that the default legal status of platform workers is that they are employees, regardless of what companies’ own terms and conditions say. For platforms to prove otherwise, the responsibility will now be on them — not on workers and trade unions — to pursue their case in court.

Even establishing this basic principle is a welcome forward step. Uber drivers, Deliveroo couriers, and carers hired by Care.com have long been denied labor rights like a minimum wage, a pension, holiday pay, and protection against unfair dismissal, all because of the false pretense that they are self-employed. Those days appear to be numbered.

There are also important new rights for platform workers in respect to algorithmic management. Workers will have the right to know what data these companies are collecting on them and if any of it is informing decisions that affect their work. There is also a requirement for a human explanation as to why a significant decision — such as over pay rates or scheduling — has been made, the right to have that decision reviewed if they do not agree with it, and for workers and their union representatives to have access to the data required to understand any significant changes to the algorithm.

Doubtless, many of these rights remain too limited. For example, trade unions had argued for independent arbitration of conflicts over algorithmic decisions rather than the platforms controlling the review process. Nonetheless, these proposals represent progress from what is currently a deregulated Wild West. Algorithms are a black box for platform workers who are given no information as to why fundamental aspects of their work are suddenly altered. Nor do they have any recourse to speak to a human being if they have a complaint to make or if they have been “robo-fired.”

If workers and their representatives can understand algorithmic decision-making and have a mechanism for holding the managers of algorithms to account for those decisions, there is potential for workers’ collective power to expand significantly.

Capital Divided

For all the purported novelty of the platform economy, none of the directive’s proposals are especially pathbreaking. Platforms like Uber and Deliveroo have long been getting away with combining twenty-first-century technology with nineteenth-century labor standards, and these reforms simply seek to end what labor law experts Antonio Aloisi and Valerio De Stefano call “platform exceptionalism.”

As Ludovic Voet, secretary of the European Trade Union Confederation, has pointed out, the directive “simply ensures workers will now access rights, like paid holiday and sick pay, which have been standard for other workers for the best part of a century.”

However, despite the modesty of the achievement, we should not underestimate its political significance. The commission, which is usually playing catch-up with national governments on social policy, is surprisingly in the vanguard: no European government has yet come close to such a far-reaching proposal to regulate platform work.

As France Insoumise MEP Chaibi stated in her response to the announcement, “It’s not very usual that a social victory comes from the European Commission, so I think it is very historic.” The obvious question, then, is why it happened.

First, the indispensable backdrop to these reforms is the burgeoning international movement of platform workers getting organized in unions and demanding workers’ rights through protests and strikes. This year alone, we have seen a wave of wildcat strikes at Berlin grocery-delivery platform Gorillas, a huge and victorious strike of E-food couriers in Greece, and one of the first gig economy strikes led by a big traditional union in Barcelona.

That movement mobilized in Brussels in October to bring its message directly to the EU Commission in a global “Alternatives to Uberisation” forum, which included a protest outside the commission’s headquarters and a face-to-face meeting with the EU commissioner for jobs and social rights, Nicolas Schmit.

“When they had the opportunity to talk with Commissioner Schmit, it was important to say not only is Uber watching you, so are workers,” Chaibi said following the announcement of the directive. “I think that has been very important in the balance of power and in the victory.”

Second, Europe’s capitalist class is divided on this question. Many companies operating with more traditional business models are not happy that they are being put at a competitive disadvantage as they continue to pay a whole set of costs tied to being an employer that the platforms are dodging. The European Commission’s impact assessment found that the directive is likely to cost platforms €4.5 billion due to the increased labor costs and tax contributions that come from employment status.

Commissioner Schmit was keen to stress this factor when presenting the directive on Thursday, stating, “There’s also an economic argument about ensuring a level playing field: Why should some companies not have to meet the same social standards as companies they are competing against outside the platform economy?”

Asked by a journalist to respond to criticism from BusinessEurope — the largest corporate lobby group in Brussels — Schmit responded, “This brings a level playing field, which is exactly what they asked for.” For a section of European capital, the directive was a necessary remedy to the regulatory arbitrage of digital labor platforms.

It’s worth noting that in Spain, where a “rider law” was introduced earlier this year to provide employment status specifically for couriers, a similar division between capitalists led to the Spanish Confederation of Business Organizations (CEOE) backing the law, and then Spain’s largest food delivery platform, Glovo, to leave the CEOE and set up an ultra-right-wing alternative.

We can expect these divisions between old and new sections of capital to intensify as the digitalization of work becomes standardized across the continent.

The final factor is the shifting political ground. Shortly before Olaf Scholz was sworn in as the first Social Democratic chancellor in Germany since 2005, his labor minister signed a letter to the EU Commission alongside his counterparts from Spain, Italy, Portugal, and Belgium calling for a directive that was not “watered down.”

That political pressure from the new power in Berlin, combined with the fact that even center-right MEPs had united behind the left-led European Parliament motion for employment status in the platform economy — backed by a resounding vote of 525 in favor and 39 against — meant the political space to side with the platform lobby was very limited.

What Now?

The crucial next step for the platform work directive to become law will be to get the green light from the EU Council, made up of heads of state or government from all twenty-seven EU countries. On January 1, the presidency of the council falls into the hands of French president Emmanuel Macron, a committed ally of the platforms, so there could still be bumps in the road for the directive.

The deep pockets of the platform lobby will also be mobilized to water down the directive as much as possible, and they have time on their side. It won’t be until 2024, or possibly even 2025, when the directive is implemented across the EU.

However, even the publication of such a directive changes the political dynamics in the capitals of Europe. There is already pressure on some of those five ministers who backed a strong directive to not wait on implementation from Brussels and instead introduce the principles of the directive into national law now.

And what about the UK, no longer harmonized with EU labor law? The UK Government has responded to the directive by defending the “third-party status” system favored by the platforms, which gives platform workers some but not all of the rights of employees, saying it “strikes the right balance between the flexibility our economy needs and protections for workers.” However, the Trade Union Congress has responded differently, arguing that “if workers in the EU are seen to be gaining rights and having power, then workers here would expect the same.”

The gig economy model is already under intense pressure in Britain following a Supreme Court verdict in February that ruled that Uber drivers are workers. A London High Court verdict last Monday was another blow to private-hire platforms as the judge found the platform — not the driver — must have a contract with passengers. The GMB trade union is now preparing to take Bolt, a rival of Uber, to court if they don’t start to hire their drivers directly.

Momentum is building on governments across Europe to regulate fake self-employment out of existence. It’s a necessary step in building the power of workers in the platform economy — and resisting attempts to undermine basic labor rights by stealth.