Uber Drivers, Pizza Delivery Workers Get Lift From EU’s Vestager
(Bloomberg) -- Uber Technologies Inc. drivers and takeout delivery workers have a new champion in the European Union’s antitrust chief, who wants to help them fight for better pay and conditions.
In an interview with Bloomberg, Margrethe Vestager says she’s looking at ways to help “people who work in a weak negotiating position” amid concerns about the plight of workers in the so-called gig economy.
A key question is whether the EU can “give sort of European level guidance as to how to allow people to organize” without it being seen “as a cartel,” she said, referring to rules that curb price-fixing between businesses.
Europe’s tough cartel rules have squeezed billions of euros in fines out of companies that collude to increase prices. The same rules have also been used to prevent freelance workers from teaming up to collectively lobby for better wages from powerful employers such as internet platforms.
Vestager, who has become the bloc’s tech chief in addition to her role as competition watchdog, plans to change that. “We can make sure that people can unionize” because “if you’re just seen as another independent self-employed” person, “it’s very, very difficult to make that happen,” she said. Companies like Uber have transformed how many people travel in cities and order food. Amsterdam-based Takeaway.com is merging with JustEat Plc to create a $10 billion-plus food delivery giant, and Deliveroo has attracted investors such as Amazon.com Inc. to garner a $4 billion valuation.
While some companies, such as Takeaway.com, have increased the rights they offer couriers and drivers, tension remains. In 2018 UberEats riders in the U.K. went on strike after a cut in delivery fees, but there is little riders or drivers can do to protest against wages or working conditions. They can’t argue with the software that spits out the orders.
And while the couriers might be viewed as freelancers or second-jobbers, increasingly they are low-income earners who rely on one website for pay that varies wildly. Unlike most European workers, they often have limited or no insurance for accidents on the job.
“If you look at Deliveroo and UberEats, the app decides what they do when they work and how much they earn. So there is no way of negotiating with those platforms,” said Joris den Ouden, a labor organizer for the Dutch trade union FNV working with food delivery riders. “The amount of money you make depends on how many orders you can do so people are buying electric bikes to be faster and jumping lights.”
“Deliveroo has long campaigned for a change to the law to enable self-employed riders to be given more benefits by platforms and will continue to do so,” a spokesman for Deliveroo said in an emailed statement. A spokesman for Uber declined to comment.
In the U.K., the Independent Workers’ Union of Great Britain has challenged companies such as Uber on whether drivers should be entitled to overtime and holidays. Some riders in the Netherlands are working 50-60 hours a week and some are making less than the minimum wage of just under 10 euros ($10.90) an hour, den Ouden said in a phone interview. Deliveroo riders went on strike in the country last August after the company ended some bonuses “but in the end, nothing really changed,” he said.
Working out the impact for online platforms such as delivery apps is difficult, given the variable nature of the jobs involved. But in 2016 Takeaway.com launched Scoober -- a restaurant delivery service. By the end of 2019, Scoober used around 9,000 couriers that delivered 5.4% of Takeaway.com’s orders.
Even though Scoober is a small cut of Takeaway.com’s total deliveries, it is an expensive business to run, with the company often hiring couriers via employment agencies. Over 2019, Scoober expenses accounted for 73.9 million euros of Takeaway.com’s cost of sales, representing 67% of the total cost of sales in that period, or about 8,000 euros per courier.
Cartel rules are part of the problem. In 2004, freelance Irish actors were forced to halt a union pact that set a minimum rate of pay for voiceover work after the country’s antitrust regulator declared their agreement illegal. Dutch musicians fought a similar stance taken by Dutch authorities -- and won in 2014 after an EU court backed their argument that wage pacts should be allowed for workers who are “falsely self-employed” and reliant on one powerful employer.
The inability to bargain for wages had a chilling effect, said Ivana Bacik, an Irish senator who eventually pushed Ireland to change the law to allow some types of freelance workers to bargain as a group for better pay. “It became a race to the bottom. The rates were dropped and people found their incomes affected very severely,” she said of the antitrust ruling.
Vestager, who previously served as Denmark’s economy minister, is clearly sympathetic to labor rights, saying she comes “from a country which has had built a success on a model” based on the right to unionize. Regulators are looking at exemptions from competition law “to make sure that people who are not really independent” or self-employed “actually can unionize and be a much stronger force in negotiations.”
Vestager has previously flagged the rights of workers on tech platforms as an area that deserves scrutiny. However, the European Commission is set to move slowly, suggesting ways to improve labor conditions for platform workers next year, according to a strategy document published in February.
There are limits to who Vestager is looking out for. “We would not want dentists and lawyers” and professions in a more powerful position be able to gain the same advantage as more vulnerable workers who depend on an internet website for their livelihoods, she added.
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