Technology

Uber proposes reforms to California-style gig work in Europe

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Dara Khosrowshahi, CEO of Uber, speaks at a product launch event in San Francisco, California on September 26, 2019.

Philip Pacheco | AFP via Getty Images

LONDON – Uber called on the European Union to introduce a framework for gig economy workers, launching a model similar to California after a controversial battle over the employment status of its drivers.

The US giant shared a "white paper" with EU competition boss Margrethe Vestager, labor commissioner Nicolas Schmit and other officials. She urged policy makers to implement reforms that will protect drivers and couriers who work through an app without reclassifying them as employees.

For Uber and other companies in the so-called gig economy, this is a sensitive issue that encourages temporary, flexible work models in favor of full-time employment. Over the past year, Uber, Lyft, and other companies have successfully battled proposals in California that would have given their drivers employee rather than independent contractor status.

California voters approved Proposition 22, a measure that allows drivers for app-based transportation and delivery companies to be classified as independent contractors while still being eligible for new benefits like minimum earnings and car insurance.

"We urge policymakers, other platforms and social representatives to quickly create a framework for flexible income opportunities with industry-wide standards that all platform companies must provide for independent workers," said Dara Khosrowshahi, CEO of Uber, in a blog post Monday.

"This could include the introduction of new laws, such as the recently passed California law," he added.

Uber said the EU could alternatively set new principles through a "European model of social dialogue" between platform workers, policy makers and industry representatives.

"Third way"

Uber has warned that by treating its drivers as employees, authorities would leave the company with no choice but to increase costs – and that those costs would be passed on to customers.

Uber envisions a "third route" to employment status in the gig economy that offers drivers some protection while still allowing them flexibility in contract work. In the US, the company proposed benefit funds that workers could use for health insurance and paid time off, for example.

The company's European White Paper calls for new rules that include "industry-wide competitive conditions" and establish a "consistent income base" for workers across platforms.

The move precedes a review by the European Commission on February 24th, which aims to lay the foundations for the regulation of gig economy platforms.

It also comes at a time when food delivery is booming as taxi hail services in Europe have been hit hard by coronavirus lockdowns. Companies like Uber and Deliveroo have been criticized for failing to provide a safety net for drivers during the pandemic.

Meanwhile, drivers are making their own demands on Uber's business practices across Europe. In the UK, the Supreme Court will rule on whether to classify Ubers drivers as workers eligible for protections such as minimum wage and vacation pay. Elsewhere, Uber drivers in the Netherlands are demanding that the company disclose how its algorithms manage their work.

It's not the first time Uber has been scrutinized in Europe. In 2017, the European Court of Justice dealt a major blow to Uber by ruling that it was a transport company rather than a digital company, paving the way for tighter regulation of the company. And London has twice banned the app from operating in the British capital for security reasons. Uber was granted a temporary London license in September.

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Katherine Clark