Uber CEO Dara Khosrowshahi speaks at a product launch event in San Francisco, California on September 26, 2019.
Philip Pacheco | AFP via Getty Images
LONDON – Uber has asked the European Union to introduce a structure for workers in the giant economy, launching a model similar to that adopted by California after a controversial dispute over the employment status of its drivers.
The US giant shared a “white paper” with EU competition chief Margrethe Vestager, employment commissioner Nicolas Schmit and other officials. He urged lawmakers to implement reforms that protect drivers and messengers operating through an application, without reclassifying them as employees.
It’s a thorny issue for Uber and other companies in the so-called gig economy, which encourage temporary and flexible working models in favor of full-time employment. Last year, Uber, Lyft and other firms successfully fought proposals in California that would have given their drivers the status of employees rather than independent contractors.
Californian voters approved Proposition 22, a measure that would allow drivers of application-based transportation and delivery companies to be classified as independent contractors, while giving them new benefits such as minimum earnings and vehicle insurance.
“We are calling on lawmakers, other platforms and social representatives to act quickly to build a framework for flexible earning opportunities, with industry-wide standards that all platform companies must provide for self-employed workers,” said Uber CEO Dara Khosrowshahi, on a blog Monday.
“This may include the introduction of new laws, such as legislation recently enacted in California,” he added.
Uber said the EU could, alternatively, define new principles through a “European model of social dialogue” between platform workers, legislators and industry representatives.
‘Third way’
Uber warned that by treating its drivers like employees, the authorities would give the company no choice but to increase costs – and that those costs would be passed on to customers.
Uber provides a “third way” for employment status in the giant economy, which offers drivers some protection, while allowing flexibility in contracted work. In the United States, the company has suggested benefit funds that workers can use for things like health insurance and paid time off.
The company’s European white paper calls for new rules that encompass a “level playing field for the entire industry” and define a “consistent earnings base” for workers on different platforms.
The move comes before a review by the European Commission on February 24, which aims to lay the foundations for the regulation of Economy gig platforms.
It also comes at a time when food delivery is growing rapidly, while taxi call services have been severely affected by coronavirus blockages in Europe. Companies like Uber and Deliveroo faced criticism for failing to provide drivers with a safety net during the pandemic.
Meanwhile, drivers are making their own demands on Uber’s business practices across Europe. In the UK, the Supreme Court must decide whether Uber drivers should be classified as workers entitled to protections such as minimum wages and holidays. Elsewhere, Uber drivers in the Netherlands require the company to reveal how their algorithms manage their work.
It is not the first time that Uber has faced scrutiny in Europe. In 2017, the European Court of Justice judged Uber to be a major setback when deciding that it was a transportation company rather than a digital company, paving the way for stricter company regulation. And London has twice banned the app from operating in the UK capital for security reasons. Uber received a temporary license from London in September.