This year will be a crucial year for the platform economy. After the European Commission’s proposal on a directive on improving working conditions in platform work in December 2021 and long discussions in the European Parliament and Council in 2022, this year the directive might be finally adopted.
43 million people will work in the platform economy by 2025
But let’s go one step back. The platform economy began to emerge in Europe in the mid-2000s driven by rapidly developing technological innovations such as widespread use of the internet and mobile devices along with online applications. The COVID-19 crisis has accelerated the digitalisation of work and increased the need for labour supply for people working via platforms such as Just Eat, Uber or Bolt.
Nowadays, over 28 million people in the EU work through online platforms and some estimates suggest that by 2025 43 million people will opt to work in the platform economy.
In the meantime, online platforms are impacting the organisation of work and working conditions. The absence of legally binding definitions for platform activities and the provision of work is causing a deeper fragmentation in the EU labour market, leading to various misinterpretations of labour law and creating regulative loopholes for deceptive practices.
Proposal to improve working conditions in platform work
In December 2021, the European Commission reacted with a proposal for a directive on improving working conditions in platform work. The key aim is to ensure that people working through online platforms obtain the correct employment status in light of their actual relationship with the platform and gain access to the applicable labour and social protection rights. Currently, workers are presumed to be self-employed and it is in their responsibility to challenge the status in court. In consequence, many platform workers are misclassified as self-employed persons or as freelancers. This leads to a number of negative impacts with no or a limited access to social protection as well as ‘precarisation’ of working conditions in the long run.
The second main aspect is to ensure fairness, transparency and accountability in algorithmic management in the platform work context. Online platforms are based on algorithms and it is important that workers understand the issues related to their working conditions and work management. So far, algorithms are not subject to public scrutiny under the excuse of protecting business secrecy.
European Parliament takes important step towards a strong directive
In the European Parliament, the last year ended with an important step towards a strong directive. On December 12, the Parliamentary Committee on Employment and Social Affairs (EMPL) voted in favour of a compromise text, focusing on “the protection of workers, the protection of good employers, the protection of the ‘genuine’ self-employed” – according to rapporteur Elisabetta Gualmini (MEP, S&D). In contrast to the Commission’s proposal, providing five criteria that could motivate a legal presumption of employment, the compromise text of the European Parliament is in favour of achieving a general presumption without criteria. This goes in line with key demands from trade unions. Although, in January the report still needs to go through a final vote at plenary, which might be particularly risky for the deal, as members of the Parliament tend to be less oriented toward worker protection than the EMPL committee.
Council attempts to weaken proposal
In the Council, the Czech presidency presented its own compromise text, which is in huge contrast to the debate in the European Parliament. ETUC Confederal Secretary Ludovic Voet estimates that the proposal would “weaken protections for precarious platform workers”. Also seven members states have objected the latest Czech proposal. Time is nearly up for the Czech presidency to reach a deal and Stockholm takes over in February 2023 to find a compromise. Commissioner Nicolas Schmidt asked the Council to revert to directive original text. However, it is high likely that the new Swedish presidency continues on this path and might bring down the level of worker protection even further.
FES research project goes beyond current debate
Certainly, the directive addresses crucial aspects in order to regulate the platform economy in Europe. Nevertheless, it does not cover all issues of platform work. However, it is important to go beyond the current debate. Bearing this in mind, the Competence Centre Future of Work by the Friedrich-Ebert-Stiftung initiated last year the international research project “Mapping Platform Economy”. This project sheds some lights on the complexity of the platform ecosystem by providing visualisation of several regulatory aspects of platform work at the national level in over 30 countries.
According to the research results, only a few European countries have tried to introduce a regulatory framework with an official definition of online platforms or specific regulations for the protection of platform workers. Without a clear understanding of online platforms, regulating the platform economy is a difficult endeavour.
Furthermore, the mapping reveals in which countries we can find official registers of platform companies or where collective bargaining initiatives and court cases on platform work exist.
3 areas within the platform landscape that require further attention
In the project report, the authors – Delia Badoi and Inga Sabanova – identify three areas within the platform landscape that require further attention from policymakers.
Firstly, Member States should introduce an official register of platform companies which is publicly available in order to collect more information on the number of active platforms and platform workers as well as their employment status. This type of information is particularly important in addressing the legal responsibility of platform companies, not only in terms of the quality of services provided, but also with a view toward fair working conditions for workers employed by these platforms. Currently, such registers only exist in a few Member States such as France or Portugal, but in most cases only for tax related issues and the data is not publicly available.
Secondly, platform-mediated work remains only insufficiently understood. Tasks that are performed via platforms such as delivery or care work are not new in terms of the scale of tasks involved or the level of skills required. However, platform work introduces new forms of subordination with the use of automated systems to match supply and demand for work that require further attention.
Thirdly, it needs to be recognised that an important share of platform workers are migrants and women. For example, the platformisation” also exist in fields such as care, cleaning and domestic work. These sectors are dominated by women. The initial step needed is to acknowledge that platform work is directly linked to gender and ethnic inequalities in the labour markets. This is particularly important not only in developing policy options to ensure fair working conditions for workers regardless of their race, ethnicity, and gender, but also equal collective representation by recognising workers’ voices that come from different groups and backgrounds. Especially trade unions have a central role in establishing a social dialogue.
What to expect for 2023?
As already mentioned, 2023 has the potential to be an important year for the platform economy. A crucial factor is the final compromise on the Commission’s directive proposal. Only a strong directive can have a real impact on improving working conditions for platform workers!
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