Uber Eats in Spain has made good on its threat. Warning in an open letter to Labour Minister Yolanda Díaz in March that the company would revert to a freelancer model if the government continued to fail "to enforce the Rider Law", in reference to Glovo, Spain's largest food delivery platform which has refused to employ it's riders despite the Rider's Law was introduced in August last year, Uber Eats has now done exactly that.
On Monday, the company told its riders that they will be able to “make deliveries as a freelancer” again “after the summer”. You can read our full report on this development here.
So much for Uber CEO Dara Khosrowshahi's promise just a few weeks ago that the illegality of the Travis Kalinick days at the company, exposed in the Uber Files, was now behind them. Uber Eats already faced legal challenges over their handling of the new law, as on the day it entered into force they moved all their riders over to sub-contractors, an approach which Spanish unions CCOO and UGT say was an illegal transfer of workers. Now, the company claims riders will have the choice of continuing with the sub-contractor model or becoming freelancer again, with the freelance option tweaked so that, just like Glovo, they can claim (however implausibly) that the new model complies with the Rider's Law.
The move is an embarrassment to the government, as it comes on the one year anniversary of the Rider's Law. Now, the two biggest food delivery platforms in Spain are openly defying the law, putting its credibility into serious question. Díaz's number two, Joaquín Pérez Rey, has responded forcefully to the latest move, stating that they will be "relentless" in defending the legislation.
"I insist: there are no business models that can challenge labor rights," Joaquín Pérez Rey said. "And in the face of any challenge, obviously, the State, the Ministry of Labor, the Labour and Social Security Inspectorate have the necessary instruments to demand responsibilities and, naturally, to ensure that the law is complied with in all its dimensions."
But the reality is that Glovo has been ignoring the law for a year now and has not faced any consequences so far. The Labour Inspectorate is conducting an investigation, and it is thought that strong fines are in the pipeline, but will this make up for the competitive advantage Glovo have gained over the past 12 months by using a model which allows the firm to flood the streets with riders who do not have to be paid for waiting time, keeping delivery times fast and customers happy? Indeed, this competitive disadvantage was the reason for Uber Eats' complaint in March.
Rey has suggested that a new enforcement strategy could be forthcoming, by clamping down on restaurants which make use of these illegal distribution systems. This could potentially see restaurants pro-actively disengage from Glovo and Uber Eats in fear of fines. However, targeting restaurants rather than the platforms themselves does not seem like the most efficient approach to ensure compliance. Adrián Todolí, professor of Labour Law at the University of Valencia, has said that he doesn't think targeting restaurants "is the best strategy", and instead the government "should go against the platforms as France and Italy have done".
The cases of France and Italy are indeed examples of tougher enforcement strategies. In France, Deliveroo executives were criminally prosecuted for false self-employment, with three executives given fines and suspended prison sentences, while the company received the maximum fine (€375,000) and was forced to display the verdict on their app and website. In Italy, a judge threatened a monster fine €730 million, which quickly brought the food delivery companies into line. In return for reducing the fine to just €60,000, the four companies agreed to a modification of some 20,000 riders contracts so that they received regular medical checks, were provided with safety equipment, as well as personal protective devices or training in matters of security.
Governments must learn quickly that if they really want these platforms to operate within regulatory restrictions, legislation and court rulings aren't enough in and of itself. Strong enforcement of the law is required, especially now that many of these platforms are struggling in the inflation crisis and becoming increasingly desperate in pursuit of cost reductions.
Ben Wray, Gig Economy Project co-ordinator
Gig economy news round-up
- DELIVEROO SET TO LEAVE NETHERLANDS: British food delivery platform Deliveroo is set to exit the Dutch market. The company announced on Wednesday [10 August] "a consultation process" on ending its operations in the Netherlands, a departure which is expected to be complete by the end of November. The company made the announcement in its half-year results, in which it said that Dutch revenue is just one per cent of the company's total revenue, and is not equivalent to the investment that has been put into the company's operations there. Deliveroo, which hires its riders on a self-employed basis, faces a Dutch Supreme Court case in December which could find that it has to employ its riders, after several Dutch judges have ruled in favour of an employee classification. Deliveroo exited Spain shortly before the Rider's Law was introduced, and quit Germany in 2019. In both cases low market share was a key driver of the decision to exit the market. Over 50% of the company's revenues come from Britain and Ireland. Read more here.
- LIEFERANDO RIDERS ELECT FIRST WORKS' COUNCIL IN BERLIN: Lieferando riders became the latest in the German capital to establish a Works' Council, after an election which finished on Monday [8 August]. Lieferando is the German brand of Just Eat and the largest food delivery platform in the country. A Works' Council is a body in German industrial relations which gives workers official representation within a workplace. Prior to the election, management had made two failed bids to influence the process through the courts. After an attempt to have the office staff, which included those in a supervisory position, included within the Works' Council was rejected, the management then tried to have the vote cancelled, which was also rejected in court. Out of 200 votes cast out of a total workforce of 1400, the Lieferando Workers' Collective list had the most votes with 131. Berlin now has Works' Councils established in Gorillas, Dropp and now Lieferando, with attempts to establish Works' Councils in Flink and Getir. A member of the election council stated after the vote that they "have now elected the largest workers council at Lieferando in Germany. Never before have so many workers been as active as last week."
- JUST EAT COULD FACE BIG FINE FOR ITS "TOTAL SURVEILLANCE" OF RIDERS: Bayerischer Rundfunk (BR), a Germany broadcaster, has uncovered the detailed tracking data which Lieferando, the German brand of Just Eat, collects on its riders, which could lead to a big fine based on violations of data protection. BR found that Lieferando uses the "Scoober" app, which collects 39 data points per delivery. In some cases, more than 100,000 data points were recorded on full-time riders going back to 2018, a level of data collection which data protection academics and state officials believe falls foul of the EU's General Data Protection Regulation (GDPR). Lieferando has said it believes its data collection "complies with the applicable data protection regulations". The chair of the Lieferando general works council for Germany, Semih Yalcin, said there is "total surveillance here". Stefan Brink, data protection officer from the German region of Baden-Württemberg, investigated the app after a driver complained, and has now sent his investigation to the Dutch Data Protection Authority. Just Eat is headquartered in the Netherlands. Brink anticipates a fine "in the double-digit million range". Read more here.
- GOPUFF TO EXIT SPAIN AND FRANCE: American grocery delivery company GoPuff is pulling out of the Spanish and French markets, in the latest retreat in the grocery delivery sector. GoPuff has begun the consultation process for the compulsory redundancy of 186 workers and shutting down their five dark stores in Madrid. GoPuff began operating in Spain in April 2021. In France, it is closing down 25 dark stores, the number of employees being laid-off is unknown. In Luxembourg, the company plans to sack 50 workers and reduce its operations by 25%. Grocery delivery platforms expanded rapidly during the peak of the pandemic, but as pandemic fears reduce and the inflation crisis bites, many are retreating to their home markets and laying off employees. Read more here.
- INFLATION IS BENEFITING OUR BUSINESS MODELS, GIG PLATFORMS SAY: Uber, Lyft and Doordash, three US firms which hire drivers and riders on a self-employed basis, have all said during recent earnings calls that the inflation crisis is proving to be a boost for attracting workers, according to The Washington Post. Uber boss Dara Khosrowshahi is reported to have said that more than 70 percent of new drivers joining the app have identified inflation as one of the reasons, with new driver sign-ups in the US up more than 75% over a year ago. The company had to raise prices to attract drivers as many did not return after stopping work during the pandemic, while others have seen rising fuel costs make driving uneconomical. Khosrowshahi told a conference call: "No one wishes for a tough economic environment or elevated inflation affecting so many of us, including Uber drivers, but at the same time, from a competitive standpoint, there is no question that this operating environment is stronger for us”. Workers struggling to make ends meet may be picking up driving or riding as a second or even third job. Last week, the company reported better than expected revenue figures for the second quarter. Read more here.
- TAXIS FROM ACROSS EUROPE TO MOBILISE IN BRUSSELS 8 SEPT: Taxi unions from across Europe have organised a mobilisation in Brussels on 8 September in response to the Uber Files revelations. The mobilisation will include a 'march of taxis' in the city, and has been called by ANTAXI, a European-wide coalition which includes taxi unions from Spain, Italy, Portugal, France, Switzerland and Belgium, among other countries. Elité Taxi Barcelona, which has been mobilising to keep Uber out of the Catalan capital for years, said it would be participating in the demonstration, and are establishing a resistance fund so those who do not make the trip can contribute to the costs for others who will be driving from Barcelona to Brussels to take part. The EU was caught up in the Uber Files after it was revealed that former EU Commission Vice-President Neelie Kroes had breached rules on lobbying after working at the EU by pushing the interests of Uber with top figures in the Dutch Government. The EU Commission responded to the news by saying it would be contacting Kroes for answers. Click here to read more.