Disruption has been the characteristic of delivery companies, accommodation platforms and ridesharing services over the last decade as the gig economy soared around the world.
But disruption is now threatening the disruptors.
Cracking open the algorithms that determine how work is farmed out on digital platforms is also part of Spain’s new regulations. Companies are now required to explain to staff how the apps share incoming jobs and crucially, it applies to all digital platforms, not just delivery riders.
The world is watching Spain’s brave venture closely, including the European Commission which opened a public consultation period on potential EU-wide rules.
Across the world, there has been a wave of court and industrial tribunal rulings in recent months that are reverberating through the gig economy.
In Australia, the Fair Work Commission has just ruled that Deliveroo riders are not contractors, with the tribunal determining that a former rider for the food delivery company did have a claim to unfair dismissal because ‘the correct characterisation of the relationship between the defendant and Deliveroo is that of employee and employer.’
It dismissed Deliveroo’s argument that riders can work across multiple platforms at the same time and should therefore be seen as independent contractors. The digital platform intends to appeal as it faces the prospect of a wave of backpay claims.
In March, the UK Supreme Court determined that Uber drivers are ‘workers’ for the purpose of UK employment law, not contractors using Uber as a platform, as the US-based company claimed.
Uber argued that drivers were self-employed contractors and the smartphone app was a platform to connect drivers with users and process payments, but an appeal on those grounds was dismissed. The Court found that simply categorising staff as self-employed contractors does not determine their status if, in practice, those ‘contractors’ are treated as employees or workers.
Yet there is far from universal agreement among legal minds.
The UK’s decision came after a California judge last year ordered Uber and another ride-share platform, Lyft, to start treating their California drivers as employees. That decision was superseded by Californian legislation that classifies Uber and Lyft drivers as contractors, which has encouraged other employers to essentially ‘Uberise’ the workforce.
The Paris Court of Appeal confirmed in April that delivery riders in France are independent contractors and not employees, reaffirming the position it took previously in November 2017.
New Zealand initially ruled along similar lines as California but the UK decision has caused some to think this could change in the future, while South African Uber drivers are also interested in the outcome.
The gig economy has been around for decades but it was digital platforms and in particular, the smartphone, that gave rise to how we understand it today.
Delivery rider services began to take off in Spain from around 2015, powered by start-ups such as Glovo, which gathered 100,000 sign-ups and €2 million in seed funding within months of launching its app. The company now has more than 10 million users.
With the Supreme Court ruling in late 2020 that riders were considered employees, the legislative wheels were set in motion to regulate digital platform work, and a dialogue between employers and trade unions was established, as well as with Riders for Rights.
The flexibility argument has been proffered by global platform Uber, who stated that regulation will hurt the thousands of riders who did not want to be classified as employees.
Trade unions and labour law experts had hoped that the law would regulate work in ride-share sector and across other digital platforms. But for the moment, only delivery drivers and riders are affected.
Delivery companies have 90 days from the passing of the law in mid-May to comply and the platforms are rethinking their business models in various ways.
Just-Eat has hired some of its riders, and covers peak demand with workers from transport companies, while Glovo has turned to employment agencies.
Although the legislation makes it harder for companies to employ freelance couriers, several riders’ associations believe it does not completely resolve their legal situation, with further potential court battles anticipated.