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Spain delivers latest worker status blow to platforms
12/03/2021
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Deliveroo Barcelona

The Spanish government has announced new legislation to recognise riders of delivery platforms, such as Deliveroo and UberEats, as employees, not self-employed contractors.

Spain is the first country in the European Union to legally recognise the employment status of riders after the Ministry of Labour and Social Economy negotiated an agreement with trade unions and the employers’ associations.

The announcement comes six months after Spain’s Supreme Court ruled that couriers working for Barcelona-based food delivery app Glovo were employees, as well as separate rulings in Madrid and Valencia courts against UK-founded Deliveroo.

In the coming days, it is expected that the government will pass a royal decree-law modifying the Spanish Workers’ Statute to expressly presume that those using digital platforms for work are employees.

The legislation will also require tech companies to provide workers’ representatives with information about how the platforms’ algorithms function in assigning jobs and assessing rider performance, which the government claims will “neutralise algorithmic punishments”.

“[Riders] are now considered as salaried workers and will enjoy all the relevant protections,” said minister for labour, Yolanda Díaz, in a televised statement, adding that the “pioneering” new law is part of “a modernisation” of Spain’s labour market.

However, the Association for Spanish Startups has warned the government that new regulations could see Spain “lag behind other great European, American or Asian powers”. Glovo founder co-founder Sacha Michaud called the move a mistake.

Delivery platforms have put forward constructive proposals to enable riders to work flexibly... these messages have also been overlooked

“This has probably been the most controversial topic in Spanish social case law,” Cuatrecasas partner Valentín García told IEL. “There have been different resolutions from different judicial bodies offering contradictory analysis of this reality. Riders’ platforms consider that this new regulation is not adequately regulating the reality of these services.”

It has been suggested that more than 75% of the 30,000 couriers working in Spain would lose their source of income as an unintended consequence of the new laws, while restaurants would lose up to €250m in revenue.

“Over the past few weeks, thousands of couriers across the country have come together to stand against this proposed regulation that would deprive them [of] the independence they value most,” an Uber spokesperson told IEL.

“At Uber, we are fully committed to raising the standard of work and giving independent workers more benefits while preserving flexibility and control. We want to work with all relevant parties across Spain to improve independent work, instead of eliminating it.”

The news from Madrid follows an announcement last month that the EU Commission is to consider gig economy regulations with pan-European legislation expected by year’s end.

France is expected to unveil its own gig economy regulations soon, while Uber Eats and other food delivery platforms were recently fined €733m by Italian prosecutors for breaches of labour safety rules.

February also saw the UK Supreme Court decision that Uber drivers are workers, while a Dutch court ruled that Deliveroo had misclassified its riders as independent contractors and were liable for holiday, sick pay, and other employment entitlements.

A spokesperson for Deliveroo told IEL that Spain’s proposal “goes against the interests” of riders, restaurants, and customers, but that the platform would continue to engage with the Spanish government to seek “alternative ways forward”.

“Delivery platforms have put forward constructive proposals to enable riders to work flexibly with additional security and have warned that forced reclassification will lead to less work for riders, will hurt the restaurant sector, and will restrict the areas where platforms can operate. Unfortunately, these messages have also been overlooked.” 

Deliveroo cynically uses the language of flexibility as a fig-leaf for shirking their responsibilities to employees

Deliveroo recently confirmed it has selected the London Stock Exchange for a much-anticipated initial public offering. However, this week a global network of riders warned potential investors of growing legal, regulatory, and reputational risks for Deliveroo, urging them not to back the tech company until it improves rider safety, conditions, and pay across the 12 countries it operates in.

“Instead of affording riders the rights they deserve, Deliveroo has been putting even more pressure on them,” said Stephen Cotton, general secretary of the International Transport Workers’ Federation, which is supporting the riders’ network. “While competitors like JustEat are changing their ways, Deliveroo has left the riders feeding our cities struggling to feed their own families.”

Deliveroo is the most protested platform in the world according to the Leeds Index of Platform Labour Protest, which records reported instances of protest by gig workers. Riders have reported their accounts being deactivated without explanation, having to meet unrealistic delivery targets, and a lack of adequate health and safety measures.

“This sits alongside continued attempts by Deliveroo to shirk responsibility for job security, minimum wages and social security protections by misclassifying riders as self-employed contractors,” said Cotton.

“Deliveroo cynically uses the language of flexibility as a fig-leaf for shirking their responsibilities to employees,” said Felipe Diez Prat, member of Spain’s Unión General de Trabajadores and former Deliveroo rider. “Deliveroo’s IPO is significant because it speaks to a future in which companies are rewarded for driving down pay for workers.”

Without its riders, Deliveroo wouldn’t be the global brand it is today, added Deliveroo rider Jérémy Wick, a member of the General Confederation of Labour union in Bordeaux. “Investors and consumers must tell Deliveroo to do right by the riders who make its business viable. Be a responsible business: protect the health and safety of riders and give them fair and transparent pay.”