EU regulation: Improving the working conditions of platform workers
Arianna Podestà, European Commission Coordinating Spokesperson for Economic Affairs, tells us more about the Commission's proposals to improve conditions for self-employed workers in the platform economy.
Arianna Podestà, European Commission Coordinating Spokesperson for Economic Affairs, tells us more about the Commission's proposals to improve conditions for self-employed workers in the platform economy.
Deliveroo, Uber ... these companies are upsetting the competition with their different economic model and creating real social problems, but despite many lawsuits, they are still there. Is the platform economy here to stay?
The digital platform economy is growing quickly. Digital labor platforms create opportunities for businesses, workers and self-employed, as well as improved access to services for consumers.
A couple of figures: there are more than 500 digital labor platforms active in the EU. They include international companies as well as small national or local start-ups. Today, over 28 million people in the EU work through digital labor platforms. In 2025, their number is expected to reach 43 million people. Between 2016 and 2020, the revenues in the platform economy grew almost five-fold from an estimated €3 billion to around €14 billion.
At the same time, new ways of work also come with new challenges. It becomes increasingly difficult to correctly classify the employment status of people, leading in some cases to people missing out on the labor rights and social protection they should be eligible for. In addition, the use of algorithms in platform work can raise questions of accountability and transparency. Platform companies also stand to benefit from new rules: today, digital labor platforms are faced with a patchwork of different laws and rulings across the EU, which makes it difficult for them to expand their business across borders.
This is why the Commission proposes a set of measures to improve the working conditions in platform work, to promote transparency, fairness and accountability in algorithmic management, and to support the sustainable growth of digital labor platforms in the EU.
There is a lot of talk about the social situation of platform workers who are neither employees nor truly independent workers. Could you give us an overview of the situation of platform workers?
Digital labor platforms offer possibilities for people to make a living or earn additional income. Especially those who otherwise might face difficulties to enter the labor market can benefit, such as young people (generally, people working through platforms are found to be close to their mid-30s and younger than workers in brick and mortar companies), people with a migrant background or those with caring responsibilities.
Nevertheless, some people working in the platform economy also face challenges stemming from the misclassification of their employment status, which can range from income instability and a lack of transparency of their contractual arrangements, to precarious working conditions, including health and safety risks, and inadequate access to social protection. In addition, people working through platforms are often subject to automated decisions made by algorithms without a possibility to question the decision and seek redress. They have limited access to collective representation and bargaining.
It is important to note that the vast majority of the 28 million people working through digital labor platforms in the EU today are genuinely self-employed. However, an estimated 5.5 million could be incorrectly classified as self-employed. This has an impact on their access to social and labor rights. For example, around 55% of people working through platforms earn less than the net hourly minimum wage of the country they are working in.
The set of measures the Commission proposes is aimed at tackling these challenges and improving the working conditions in platform work, while continuing to support the opportunities, innovation and flexibility the platform economy offers.
The European Union is concerned about the situation of platform workers. How does it intend to solve this problem?
In December 2021, the Commission proposed a set of measures to ensure that people working through digital labor platforms can enjoy rights they are entitled to. They will also receive additional protection as regards the use of algorithmic management (i.e. automated systems that support or replace managerial functions at work). A common set of EU rules will provide increased legal certainty, therefore enabling digital labor platforms to benefit fully from the economic potential of the Single Market and a level playing field.
In more detail, the Commission proposal aims to:
• Correctly determine the employment status of platform workers through a set of clear criteria, giving them access to rights already available to workers, including right to a minimum wage (where it exists), collective bargaining, working time and health protection, the right to paid leave, improved access to protection against work accidents or social protection.
• Provide more transparency, rights and accountability with regards to algorithmic management on digital labor platforms by ensuring human supervision of the algorithm and helping people to better understand how tasks are allocated and prices are set, and enable them to contest decisions that affect working conditions if needed.
• Improve enforcement and traceability of platform work, including in cross-border situations by asking platforms to declare the work in the country where it is performed and make available to national authorities certain information about the people who work through them and their terms and conditions.
• Strengthen collective bargaining and social dialogue: the proposed Directive introduces the need to inform and consult platform workers and their representatives on algorithmic management decisions.
The Commission has also proposed draft guidelines clarifying the application of EU competition law to collective agreements of solo self-employed people seeking to improve their working conditions. This includes those working through digital labor platforms.
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