Food delivery companies concerned new EU ruling will lead to job losses
Food delivery companies are concerned that the new EU rulings on workers and their rights could lead to job losses and litigation in court.
The European Commission announced yesterday that it was bringing in a wave of new rules to give gig economy workers more social rights. The move is the EU’s latest attempt to regulate tech companies on the continent.
The proposal, the first of its kind, must be thrashed out with EU countries and EU rule makers before it can become law.
The ruling means that any online platform that set pay and standards of conducts for their workers must now reclassify them as employees who are entitled to minimum wage, paid holidays and pension rights.
The companies will also then become recognised as an employer if they supervise the performance of work through digital means, restrict workers’ abilities to choose their working hours or tasks and prevent them from working for other companies.
It will require ride-hailing platforms, food delivery firms and other tech companies to be more transparent on how they use algorithms to monitor and evaluate workers as well how they set tasks and fees.
Employees will also now be able to ask for compensation for breaches.
An EU executive claimed the drafted rules could apply to between 1.7 and 4.1 million workers across over 500 online platforms.
“Genuine self-employed on platforms will be protected through enhanced legal certainty on their status and there will be new safeguards against the pitfalls of algorithmic management,” EU digital chief Margrethe Vestager told Reuters.
“This is an important step towards a more social digital economy.”
The news of the impending ruling sent ride-hailing and food delivery companies’ stocks into a nosedive, with investors worrying about how it would affect the model.
