Spain’s New Law Classifying Gig Workers As Employees Deepens Threat to Gig Economy

Spain’s New Law Classifying Gig Workers As Employees Deepens Threat to Gig Economy

When the Supreme Court ruled that Uber drivers in London should be classified as workers in February, many knew it has set a trajectory that will hunt the gig economy.

On Thursday, the Spanish government announced legislation that classifies food delivery riders as employees of the digital platforms they work for, AP reported.

The legislation is as a result of Spain’s Supreme Court ruling last September that classified delivery drivers as employees not independent contractors, following a case brought by a former Glovo driver.

The new law also requires the companies, such as Glovo and Deliveroo, operating the delivery platforms, to hand over to their workers’ legal representatives information about how their algorithms and artificial intelligence system function in assigning jobs and assessing performance, among other aspects, the report said.

The Spanish government, together with the country’s main business groups and trade union confederations agreed on the new law.

But it has ignited a fresh controversy, not only between the authorities and the digital platforms, but also some delivery men who want to remain self-employed because they like the flexibility it accords them.

The Minister for Labor, Yolanda Diaz described the law as pioneering and part of modernization of the labor market in Spain, updating regulations in accordance with technological developments to ensure workers’ rights are upheld.

She said the rule on disclosing how the digital system works is “epic” as it “neutralizes algorithmic punishments.”

There have been allegations by drivers that operators of ride-hailing apps, including Uber have been manipulating the system algorithmically to cheat on the gig workers.

Diaz and other concerned voices hope disclosing how the digital system works will help to protect drivers from algorithmic malpractice by the platforms.

But a statement issued by the Association of Service Platform said the new law is an attack on Spanish digital economy.

The statement said “the rule on disclosing algorithms is a measure which undoubtedly will have a very negative effect on the development of the digital economy in Spain”.

It added that “the rule is an assault on the most basic principles of the freedom to do business and intellectual property rights.”

Deliveroo has urged the authorities in Spain to reconsider the law as it would affect the food sector. Statement issued by the London-based food deliverer said “the measure will lead to less work for riders, will hurt the restaurant sector and will restrict the areas where platforms can operate.”

The law appears complicated as it means forcing drivers who want to remain under the gig economy model to become employees, taking their rights to control their time away.

California failed where London and now Spain succeeded in classifying gig workers as employees who deserve labor rights and benefits. With this development, the gig economy in Europe has come under threat as more countries in the EU bloc will likely follow the trajectory.

Uber, which runs UberEats has been in fight with the authorities both in the US and Europe to keep its drivers independent. The proposition 22 ballots, which allowed people to decide if they want Uber to continue with the gig model through vote, helped Uber and others win the challenge against the state of California in November, but the gig economy doesn’t have such a lifeline outside the United States.

In an apparent effort to take the attention of the authorities off its business model, Jamie Heywood, Uber’s regional general manager for northern and eastern Europe said the company “have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”

The new Spanish law indicates that authorities in Europe are not impressed by such efforts by Uber and other digital platforms to uplift the livelihood of their drivers.

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