Written by 11:55 pm Europe Economy

Will Europe Junk Uber? Brussels Scrutiny for Gig Economy

Uber cited €80 for a ride to the Brussels South airport. The trip ended up costing an astronomical €225 – almost $250. Infuriated, I vowed to find another way to the airport for my next flight. 

Restrictive regulations are responsible. Belgium allows only full-time professional taxi drivers using expensive commercial vehicles to use mobile apps to collect riders. Many prices no longer can be fixed. Drivers cannot pick up customers at the airport to return to Brussels.

The battle on how to regulate gig work now has moved beyond Belgium to the center stage in EU policymaking. On January 19, the European Parliament is scheduled to vote on whether to reopen plans on a report that could reclassify millions of independent Uber drivers and Door Dash couriers, as employees.

The debate rages in the US, too. California beat Europe in trying to make gig workers full-time employees, only to be overruled by popular vote in a referendum. Uber drivers in New York recently went on strike for higher wages. 

In Europe, the issue ignites even more passion. 

Reformers see gig work injecting much-needed flexibility into the continent’s rigid labor markets. Under Emmanuel Macron, France has rejected full-time status, instead proposing a new form of social dialogue that would improve working conditions and pay. “Go to a poor neighborhood and explain to the young people, who are Uber drivers, that it would be better for them to just do nothing or to deal in the streets,” Macron says.

But labor unions worry about the precarious nature of one-time gigs and see employee status as the only way to guarantee social protection. Leaked files detailing Uber’s lobbying efforts to legalize its service in Europe provoked a wave of anger headlines. Macron, in particular, faced criticism for supporting the company.

European courts have delivered contradictory verdicts. Some say gig workers should be employees. Others rule they are independent contractors. Or others say they should receive some new status.

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The unsettled, fragmented landscape encouraged the European Commission to propose common continent-wide standards. Under the Commission proposal, some gig workers would be reclassified as employees while most could remain independent. But unhappy left-of-center European parliamentarians led by Social Democratic MEP Elisabetta Gualmini objected and demanded tougher rules – provoking this week’s parliamentary battle.

European rules could have significant economic impacts. After Spain’s socialist government ordered platforms to treat drivers and couriers as employees, food delivery service Deliveroo pulled out of the country riders associations and reported that 8,000 Spaniards lost their jobs.

Even moderate European rules would produce job losses. Up to 250,000 current couriers couldn’t work in delivery if hours would be predetermined by an employer, according to a Copenhagen Economics study. The remaining drivers actually would earn less per hour, predicts another study from Compass Lexicon consultants.

If today’s independent workers are forced to become full-time, prices for rides and deliveries will rise. Workers “would lose their jobs and those who remain employed and benefit from enhanced social protection would see their hourly earnings reduced and lose the flexibility they value so much,” Compass says.

Many drivers seem to favor the status quo. Almost 70% would not give up flexibility for fixed schedules even if this hypothetically meant (at least 15%) more income, according to the Copenhagen Economics study, which surveyed more than 16,000 couriers across Europe.

The Uber driver who took me to the airport says the Belgian regulation is hurting his business. Despite pocketing a big fare from me, he said the high prices are deterring many riders. Colleagues who wanted to drive part-time were staying home.

“How about just call me the next time and I’ll charge you €85?” he asked.

The reasonable fare wouldn’t be reported to the tax authorities. It would fuel the black market. Is that what Europe really wants?

Bill Echikson is a Non-resident Senior Fellow with the Digital Innovation Initiative and edits CEPA’s Bandwidth Blog.

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