Just a week and a half after Spain's General Election, the government has told the bosses of the country's food delivery platforms that it's time to employ their riders or face the prospect of ending up behind bars. "We have formally required these companies to comply with the law so that they are aware that if they do not, it is no longer just a problem of economic sanctions, but also a problem of criminal sanctions," Joaquín Pérez Rey, the Secretary of State for Employment, told 'El País' on Friday [4 August]. The government reformed the Criminal Code last year so that false self-employment can be treated as a criminal offence. Company execs can face prison terms of six months to six years as well as fines if they "impose illegal conditions on their workers by hiring them under formulas unrelated to the employment contract, or maintain them against a requirement or administrative sanction".To re-cap: the Spanish Government became the first in Europe to pass legislation for a presumption of employment in the food delivery sector. The 'Riders Law' came into force in August 2021 but was resisted by Glovo, Spain's largest food delivery platform, which refused to employ its riders. Uber Eats initially moved its riders onto employment contracts via sub-contractors, but one year later it decided to start offering independent contractor status once again, claiming that Glovo's continued use of freelancers had put the company at a "competitive disadvantage". Two years after the Riders Law, Just Eat is the only major food delivery platform in Spain to employ all of its riders (albeit many via sub-contracting).In March, Labour Minister Yolanda Díaz stepped up the penalties on platforms for false self-employment, reforming the Labour Inspectorate so that fines could be increased and imposed faster. Glovo has racked up over €200 million in fines, and that's only for labour inspections relating to before the passing of the Riders Law (based on the 2020 Supreme Court verdict). When ongoing inspections are concluded many more fines will inevitably be issued for false self-employment.It's highly likely that Glovo (Catalan-founded and now owned by German multi-national Delivery Hero) had been playing time, counting on a new government after the 23 July General Election as its route to legal and financial safety. Polls predicted that a coalition of centre-right PP and far-right Vox was the most likely outcome of the election, two parties which are far more favourable to the platforms' independent contractor business model. We explored what the election could mean for the battle over the Riders Law in an article published just before the election in 'Wired'. Labour law expert Adrián Todolí said that while a new right-wing government could not overturn all of Glovo's fines, it could decide that the Labour Inspectorate should not "prioritise the platform economy" in its investigations. Giles Thorne of investment firm Jeffries told us that “Glovo will be very excited about the end of Yolanda Díaz.”However, the election did not turn out that way, with PP and Vox falling just short of a majority in the Spanish Congress. The left parties do not have a majority either, and it remains possible that another General Election will be needed, but the more likely scenario now is that prime minister Pedro Sánchez will do a deal with the Catalan nationalist parties which will secure enough votes to keep him in power. Díaz, who is the leader of left-wing coalition Sumar and vice-president in the government, is not likely to be leaving office anytime soon.That explains why the Labour Ministry has decided to make it clear now that they will be acting on the new Criminal Code in relation to the food delivery sector. Díaz is giving Glovo and Uber Eats' management a final chance to accept the law, or face not just consequences for their businesses but also for them as individuals.It would not be the first time a food delivery boss was held legally culpable for illegal hiring practices. In France, two former managing directors were given 12-month suspended prison sentences and a €30,000 fine each, while a third exec was given a four-month sentence and a €10,000 fine, for “the offence of concealed work” in April last year. But what's different about Spain is that it's the government which would be prosecuting the case. It should not be surprising that systematically and repeatedly breaking the law can have serious consequences, but in an era of corporate impunity - from the 2008 banking crisis to the widespread use of tax havens - it is seldom the case that those making the decisions are held to account for company malfeasance. Even the threat of such a possibility is likely to be a significant deterrent against the sort of brazen brushing aside of the laws of the land which we have seen in Spain, where a calculation was clearly made that there was more to lose from changing the business model than legal compliance. That hubris may turn out to be very costly indeed.Ben Wray, Gig Economy Project co-ordinator
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Gig Economy news round-up |
- ELITÈ TAXI BARCELONA FINED €123K BY COMPETITION AUTHORITY FOR UBER BOYCOTT: Elité Taxi Barcelona, the taxi union known for its assertive stance against the Uberisation of the Catalan capital, has been fined €122,910 by the Catalan competition authority (ACCO) for a "collective recommendation to boycott Uber and other operators". The ACCO says the union's conduct infringes article 1.1 of the Law for the Defense of Competition. Elité Taxi is the majority taxi union in Barcelona and has led a number of strikes and other actions in the city against Uber's entry into the Catalan market, which have proven to be largely successful, as a law passed in July 2022 effectively limited private hire platforms like Uber to limousines and passenger vans. ACCO found that Elité Taxi used a "pressure campaign" against taxi drivers who sought to use Uber's app. The union has reacted furiously to the fine, with its leader Alberto 'Tito' Álvarez stating they will "block all access to the city's Airport, the Port and arteries of the city" from September 1-4 in a move he has called "operation padlock", unless the fine is rescinded. The union has also announced that they've filed a lawsuit against ACCO's resolution as they believe it "violates the fundamental rights and freedoms of taxi drivers" under EU law, including "the Right to freedom of expression (art. 20 EC), the Right of association and collective defense of interests (art. 7 and 22 CE) and the right of assembly (art. 21 CE)." Read more here.
- UK GOVT MINISTER SAYS OVER-50'S SHOULD CONSIDER BEING RIDERS: The UK Government's Work and Pensions Secretary, Mel Stride, has said that people over the age of 50 should consider gig economy work like food delivery, after a visit to Deliveroo's London headquarters. Deliveroo, which is part-owned by Amazon, has seen the number of riders aged over-50 grow by 62% since 2021, and Stride said that these were “great opportunities” due to its flexibility, and its “good for people to consider options they might not have otherwise thought of”. The number of economically inactive people in the UK has risen since the pandemic to 8.6 million, with 3.4 million of them over-50 but under the retirement age. Responding to Stride's comments, the IWGB union, which represents Deliveroo couriers, said: "If the government wants to endorse flexible work it needs to make serious reforms to ensure that gig workers are afforded basic employment rights like sick pay and pensions.
Instead it's funnelling older people into physically demanding and low paying jobs." Read more here.
- UBER TURNS FIRST OPERATING PROFIT AFTER $31.5 BILLION LOSS: Uber has reported its first operational profit in its history, a landmark for the Californian ridehail and food delivery giant. Uber's second quarter results showed $326 million in pre-tax earnings from its operations. In the same quarter last year, it recorded a $713 million loss. Previously the company had achieved quarterly post-tax profits, but always based on its equity investments, not its core activities. Uber CEO Dara Khosrowshahi hailed the news as a "seminal moment", stating that he now believed they would be profitable every quarter going forward. The company has accumulated operating losses of $31.5 billion since 2014, the first year it revealed its finances. Khosrowshahi claimed that while "the easy availability of capital over the past decade obscured the poor unit economics of many businesses,” that was never true for Uber, which had proved some analysts who claimed "we would never make any money” wrong. Read more here.
- WOLT BERLIN PROTESTS AGAINST "WAGE THEFT" CONTINUE: Former Wolt riders in Berlin who worked for a sub-contractor which refused to pay their wages before vanishing continue to demand that the company covers their lost income. Last week, two of the 29 riders who have written to the company demanding payment took their case against the Finnish food delivery platform to the Berlin Labour Court, with a protest held outside in their support. The riders believe Wolt was their real employer. This week, the group of migrant riders, who have begun organising as the Wolt Workers Collective Berlin, tweeted that they had a "negotiation" with the DoorDash-owned company, adding that Wolt "has so far denied allegations of blacklisting, union busting and wage theft". Another protest was also held on Thursday [3 August]. The Gig Economy Project spoke to one of the riders, Muhammad, in an interview in June. Read more here.
- PRIVATE HIRE PLATFORM CABIFY GREW BY 32% GLOBALLY IN 2022: Spanish private hire platform Cabify has published its financial figures for last year, reporting a 32% growth in revenue globally. As well as Spain, the company operates in Argentina, Chile, Colombia, Mexico, Peru and Uruguay. The number of trips grew to 91 million. However, the company continues to run at a loss. The Madrid-headquartered platform is seeking to have a fully decarbonised fleet by 2025 in Spain and 2030 in Latin America. In 2022 it increased its electric vehicles by 139%. Cabify's carbon footprint is still growing, by 9%, although this is lower than it's increase in kilometres driven (26%). Juan De Antonio, CEO and founder of Cabify, said: "We have a clear growth path ahead of us and expect our turnover to increase threefold in the next three years." Read more here.
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Tilting at windmills?
Humboldt University academic Valentin Niebler's piece on the need for the EU Platform Work Directive to address the problem of sub-contracting is one of a series to be posted in July on the Verfassungsblog.
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Urban Company lured women into the gig economy - and then pushed them outVarsha Bansal writes in 'Wired' about Indian beauty platform Urban Company, which has begun to dump workers after setting arbitrary, unattainable targets.
- Lancy Nuna reports in 'Insider' about the significant changes made by DoorDash, a US food delivery platform which owns Wolt in Europe, to its rider model, including the option to be paid by the hour and 'post-checkout tipping'.
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- The WE-TRANSFORM project is hosting a conference in Turin, Italy on 'a policy agenda for workers transition in automated and digital transport services', 27-28 September. Click here for full details and to register. - WageIndicator is hosting an online conference on 'A Level Playing Field for Gig Workers', 27 October. Click here for full details and to register.Know of upcoming events we should be highlighting? Let us know at GEP@BraveNewEurope.com.
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The Gig Economy Project is a media network for gig workers and we welcome contributions from workers, writers, academics, activists - anyone who wants to stand up for workers' rights in the gig economy.
If you would like to write for the site, discuss arranging an interview with GEP, or simply have information about developments in the gig economy in Europe you think we should be aware of, get in touch.
Contact project co-ordinator Ben Wray at GEP@BraveNewEurope.com or send a direct message to the Twitter: @project_gig.
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