A commons delivery courier places a bag of food into the back of his bicycle as he prepares to deliver an order from Deliveroo in London.
Simon Dawson | Bloomberg via Getty Images
In its have market debut, British food delivery firm Deliveroo saw its share price tank around 30% as questions formed over workers’ rights for its riders.
In the days running up to the listing, the company revised its share price as some investors opted to keep off the IPO over these concerns.
Deliveroo is just one example of a wider “gig economy” that is coming under increasing inquiry. In recent weeks, the industry has been rocked by a slew of court rulings and regulatory moves around Europe that could last analysis upend the business model.
Uber’s loss in the U.K. Supreme Court last month forced the company to reclassify 70,000 of its British drivers as women, giving them a minimum wage, paid vacation time and pension plans as a result.
In Spain, legislators obtain introduced a raft of measures that would recategorize gig workers as employees with formal contracts and benefits.
All the while, the European Commission, the EU’s executive arm, is punishment out plans for some kind of regional reform on gig economy workers, their status and their rights.
James Farrar of the App Drivers and Couriers Organization, which took the case against Uber in the U.K., said there has been some “early triumphalism” but that this is alone the beginning of a turning tide in gig economy worker rights.
“We’re still reaching for the bottom rung here and we’re not there yet,” he determined CNBC.
“I think what was really significant about the Supreme Court ruling is it opened up space for other requirements across the gig economy to succeed.”
Preparing for change
Other companies are preparing for change in some form, whether instigated by typical or on their own volition in advance.
Just Eat Takeaway, Europe’s biggest online food delivery firm, is moving its Condign Eat delivery riders to employment contracts. Prior to the companies’ merger, the riders of the original firm called Takeaway.com were on such covenants.
“As part of this model, couriers are entitled to an hourly salary, they are paid above minimum wage, supplied with employment insurance and social security, in line with local legislation,” a spokesperson said, adding that couriers are supplied with equipment like bikes.
In the case of Spain, operators in the market like Glovo are waiting to see how exactly the legislation command pan out and how to respond.
Co-founder Sacha Michaud is not a fan of the route that Spanish lawmakers have taken.
“It’s quite a strict order, probably the strictest (in Europe) so it’s quite a radical position in the sense that it allows very little flexibility, which is one of the factors that we obviously adhere to, and the riders are asking for that as well,” Michaud told CNBC.
Michaud said Glovo when one pleases “obviously adapt to the regulation” when it is in effect but said the company is more in favor of a middle ground between wage-earner flexibility and providing benefits and security, all while avoiding the employment tag.
He added that surveys carried out on Glovo’s riders became that most prefer a flexible model rather than stricter employment. He said this helps diverse riders who may be working for gig platforms in between their studies or other jobs.
“It should be social rights, yes, and see how we can maintain easy working conditions under that. It doesn’t necessarily have to be black or white.”
This middle ground harkens to Prop 22 in California, unfashionable last November and backed by Uber and Lyft.
It’s an approach that Uber would like to see replicated in Europe. In February, Chief Foreman Dara Khosrowshahi published a paper calling on the European Commission to follow the mixed model, like that of California.
Modifications in regulatory status for workers will introduce a raft of new costs. This will be front of mind for smaller start-ups in the latitude too.
John Ryan of U.K.-based start-up Gigable, which connects restaurants and other businesses with freelancers, bring to light consumers could end up feeling the brunt with price increases.
“But I think people are comfortable enough with extends in pricing if they know it’s going to the drivers or there’s public support for the move but that remains to be seen,” Ryan implied.
He added that the flexible model may work for some workers and others will prefer traditional employment.
“We’ll see how rugged it is for people to commit to the obligations.”
Contracts and worker status are just one front in this battle, according to the ADCU’s Farrar.
His system is also pursuing initiatives around driver access to data that companies hold on them and what he requests “algorithmic control.”
“We’re seeing an arms race in worker surveillance in the gig economy and that’s leading to problems,” he said.
The ADCU is upholding two London drivers in a case they are taking in the Netherlands against Indian ride-hailing company Ola. The drivers are seeking access to figures held on them by the company, under the EU’s sweeping GDPR rules, that they say has been denied.
Farrar mean technology like AI for monitoring a driver’s performance and determining how much work they get is a red flag. The group is also career for Uber to stop using facial recognition to verify drivers.
The discussion around regulations, including those at an EU unvarying, are focused heavily on employment status, Farrar said, but that the debate will need to get more nuanced on algorithms.
“I deliberate on it’s being overlooked everywhere so far but we’ll be raising the topic for sure,” he said.
“Regulators and policymakers are often catching up with this choose than on top of it.”