EU delivers nothingburger to Uber and Deliveroo workers

BRUSSELS — The European Union just delivered a big, fat nothingburger to food couriers and ride-hailing app drivers seeking better social protections from the tech firms they work for.

Negotiators of an EU law to secure social rights for gig workers struck a deal on Thursday. The final text — two years in the making — is a far cry from the European Commission's ambition to have EU-wide criteria to determine whether gig economy platforms like Uber and Deliveroo are, in fact, employers and whether their workers should receive benefits befitting employees.

The EU Council and its rotating presidency country Belgium watered down the draft law called the Platform Work Directive in the final week of negotiation, hoping to reach the support needed to get the law on the books in time for June's European Parliament election.

The poor end result shows how the EU still struggles to tame the platform economy — despite it being the world's leading tech regulator.

The so-called gig economy today spans omnipresent ride-hailing and food-delivery companies like Uber and Deliveroo, as well as lower-profile services like translation or legal work. Some — most notably Uber — have often faced the ire of unions and politicians for challenging Europe's social model.

By next year, the European Commission estimates that more than 42 million people will be doing some sort of platform work; the majority will be both young and self-employed.

In 2021, the European Commission got involved in a long-standing feud between platforms and unions on whether gig workers should be considered employees or contractors, a clash that has played out in courts and on the streets. Platforms argued that the flexibility of gig work justified self-employment while unions wanted employee protections and perks.

The Commission initially proposed to clarify workers' job status using a list of five criteria to determine whether a platform "controlled" a worker, including whether it determined workers' remuneration, hours and appearance. If two out of five criteria were met the worker should be considered an employee. That system spelled major implications for platforms' business model.

The draft law, championed by European Jobs Commissioner and Social Democrats' lead EU candidate in the upcoming election Nicolas Schmit, would set "clear criteria to establish whether a platform is an employer, and if so, their workers are entitled to certain social protection and labor rights," Schmit said in 2021.

In the two years since, discussions on the bill have centered on these reclassification criteria, with countless tweaks to how they were phrased.

The Belgian presidency of the EU Council threw a final curveball in the past week: it scrapped the Commission's criteria altogether. While the Belgians' text kept the idea that gig workers have the presumption of employment under certain conditions, it nixed the Commission's pitch to make specific criteria apply uniformly across the EU.

"In consequence, there are no harmonised conditions for the triggering of the legal presumption in the text of the Directive," the text reads.

The reason for the last-ditch overhaul of the text: Listing the criteria that countries would have to use was simply a dealbreaker for too many member countries, one EU diplomat said after Thursday's deal. Especially large EU countries indicated they couldn't back a too explicit text.

A rift in the German government meant its diplomats abstained throughout the process, at times prompting calls from frustrated German companies and even the Commission to finally pick a side.

France, too, obstructed earlier progress on the bill. It was among the countries to scupper a first political deal struck between Parliament officials and Spanish diplomats then helming EU Council presidency in December. That deal was struck without clear backing of enough EU countries, and was later shot down.

Spooked by Spain's misstep, the Belgians floated multiple texts to gain support of fellow countries — but in the end also headed into negotiations without a clear mandate.

Lead negotiators for the European Parliament were forced to stand by and wait for the EU Council to get its act together.

"We're responsible people," Italian Social-Democrat lead lawmaker Elisabetta Gualmini said in early January.

A deal 'at any price'

Both sides' perceived rush to get a deal at any cost had critics lashing out on Thursday, lamenting the gap between the bill's initial ambition to give both platforms and workers more legal certainty, and its hollowed-out final iteration.

"It's another dangerous example of a rush to an outcome, regardless of what the outcome is, or the harm it could create," Daniel Friedlaender, head lobbyist of tech lobby group CCIA Europe, which counts Uber and Deliveroo among its members, said on LinkedIn on Wednesday.

Right after the deal, MoveEU, a lobby group representing ride-hailing companies including Uber, Bolt and FreeNow, put it equally blunt in a statement, saying the deal was the result of a "rushed process to agree to any Directive at any price." Uber itself said in a statement that Thursday's deal "fails to deliver on any of the Directive's original goals."

"If approved, it will leave hundreds of thousands of platform workers in the dark," Uber said.

Unions, too, are displeased. "We’re concerned that 791 days after publication of the draft of the Commission, the outcome is still uncertain in Council while they got all the guarantees acceptable," said Ludovic Voet, confederal secretary of trade union umbrella group ETUC.

To top it off: even the watered-down version of the bill still faces a risk of failing. EU countries have a final meeting to sign off on it Friday.

Giovanna Coi contributed reporting.