Will Europe disorient Uber? Brussels Review of the Gig Economy

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

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

The battle over how to regulate gig work has now moved beyond Belgium to take center stage in EU policy-making. On January 19, the European Parliament is due to vote on whether to reopen plans for a report that could reclassify millions of self-employed Uber drivers and Door Dash couriers as employees.

The debate is also raging in the United States. California beat Europe in trying to make construction workers full-time, only to be voted down by popular vote in a referendum. Uber drivers in New York recently went on strike for higher wages.

In Europe, the issue arouses even more passion.

Reformers see gig labor injecting much-needed flexibility into the continent’s rigid labor markets. Under Emmanuel Macron, France 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 young people, who are Uber drivers, that it would be better for them to do nothing or traffic in the street,” Macron says.

But the unions are worried about the precariousness of temporary jobs and see in the status of employee the only way to guarantee social protection. Leaked files detailing Uber’s lobbying efforts to legalize its service in Europe have sparked anger. Macron, in particular, has been criticized for supporting the company.

European courts have delivered conflicting verdicts. Some say gig workers should be employees. Others decide they are independent contractors. Or others say they should be given a new status.

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The unstable and fragmented landscape has encouraged the European Commission to come up with common continent-wide standards. Under the Commission’s proposal, some gig workers would be reclassified as employees while most could remain self-employed. But disgruntled centre-left MEPs led by Social Democrat MEP Elisabetta Gualmini protested and demanded tougher rules, sparking 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’s rider associations and reported that 8,000 Spaniards had lost their job.

Even moderate EU rules would lead to job losses. According to a study by Copenhagen Economics, up to 250,000 current couriers could not work in delivery if the hours were predetermined by an employer. The remaining drivers would actually earn less per hour, predicts another study from consultants Compass Lexicon.

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

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

The Uber driver who took me to the airport says Belgian regulations are hurting his business. Although he pocketed a big prize from me, he said the high prices deterred many passengers. Colleagues who wanted to drive part-time stayed home.

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

The reasonable rate would not be reported to tax authorities. This would feed the black market. Is this really what Europe wants?

Bill Echikson is a nonresident senior fellow with the Digital Innovation Initiative and editor of CEPA’s Bandwidth blog.

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