Uber risks death by a thousand court cases

 

Uber risks death by a thousand court cases

 

The ride-hailing app faces of the prospect of losing its core business model to Europe’s judges.

 

BY PIETER HAECK

September 20, 2021

https://www.politico.eu/article/uber-platform-employees-workers-benefits/

 

If Uber becomes a traditional taxi company that owns its cars and pays salaries to its drivers, would it still be Uber?

 

That's the question its executives now face as courts across Europe decide on the status of its drivers. With thousands of its drivers pushing to be recognized as employees, a core component of the company's business — flexible drivers with working flexible hours — is at risk.

 

Last week, a Dutch judge ruled that Uber drivers should be classified as employees and are entitled to benefits that come with that status. A similar ruling was delivered by the U.K. Supreme Court in February, which reclassified drivers as “workers,” meaning they are entitled to minimum wage, working time protections and holiday pay. More than 100 similar court cases are progressing all over Europe, and while many have sided with Uber, the majority are taking the side of drivers.

 

With Spain passing a law that requires all platforms to recognize their couriers as employees, the trend appears unpalatable for Uber, which warned that independent work itself is at risk. The company “supports efforts to strengthen independent work — rather than eliminate it — with industry-wide minimum standards that protect all platform workers,” it said in an email on Thursday.

 

Balancing the benefits of flexible work, like deciding when and how much to work, with ensuring that workers have minimum protections and employment benefits — not to mention maintaining value for customers — is something other countries like Germany and France are also grappling with.

 

Brussels weighs in

And now, the European Commission is wading into the debate too, which could set a precedent across the Continent.

 

The bloc’s executive body will present a legislative initiative in December that aims to improve the working conditions of platform workers, which form more than a tenth of the bloc's workforce. It's unclear what the Commission will propose, given it has limited authority over labor policy. The Commission said it could propose a directive, which requires member countries to come up with their own laws to meet a goal the EU sets out.

 

It knows the legal tides are changing.

 

“Court rulings have gone in different directions, but most judges have decided in favor of reclassifying nominally independent contractors as workers and platforms as employers,” a Commission document said.

 

The Commission “cannot ignore” these rulings, according to Valerio De Stefano, a platform work researcher at KU Leuven. “This is not just one or two tribunals, it’s supreme courts or courts of appeal. It’s a wave of judgments that have confirmed that this kind of work is compatible with employment status. It will definitely influence the Commission’s reaction.”

 

The company says it's happy to negotiate benefits and other aspects of the job with its drivers, but De Stefano said that won't work. “You can promise as many benefits as you want, but employment protection is not a menu à la carte. You cannot pick and choose what kind of protection you want to give. No employer is allowed to do that.”

 

MEPs are trying to nudge the Commission towards classifying workers as employees too. On Thursday, the European Parliament adopted the recommendations of a report that called for stronger rights for platform workers. The report, written by French liberal MEP Sylvie Brunet, was dismissed by Uber as “harmful legislation.”

 

The crux of the proposal is to allow a gig worker to challenge their status and place the legal burden on the platform to justify why the worker wouldn't qualify as an employee. The proposal doesn’t mean that every gig worker is automatically an employee, but it does make it relatively easy for a worker to be classified as one. “This will also, I think, change the comportment of the platforms,” Brunet said in an interview. “Because they will have to be ready to be clear about the status.”

 

It's unclear if the Commission will integrate the Parliament's recommendations, which are nonbinding, into its own legislation, but companies are fretting all the same.

 

'The wrong issue'

Any “such court decisions or potential legislative changes are addressing the wrong issue,” according to a statement by Move EU, a lobby group representing ride-hailing companies including Uber, Bolt and Free Now.

 

The group argues that most drivers prefer to be self-employed, and the flexible hours the status gives them. “Any decision to reclassify independent drivers as employees is concerning given that this directly contracts what the vast majority of drivers say they value the most: the flexibility and independence to work when, where and for whom they want.”

 

The Commission has limited authority over labor policy, which remains a national competence, but the Commission's proposal is still likely to have clout, as courts and legislators look across the Continent for direction and legal precedent.

 

But some countries have warned against reclassifying workers as employees, granting Uber some powerful officials and governments who share their perspective. France, for example, said governments should be careful "not to tip the world of platforms into the world of employment, that is not reasonable economically," according to Secretary of State for European Affairs Clément Beaune.

 

In Spain, where the so-called Rider Law is in effect, some couriers' unions have warned that becoming reclassified as employees has actually threatened their livelihoods as some companies, including Deliveroo, are considering leaving the country.

 

But even if the Commission and other countries don't adopt Spain's law, Uber's business model is still under threat, according to Brunet, the MEP.

 

"It's impossible to continue with this model ... because there will be more court judgments."