gig economy freelancer

Plans To Save Gig Workers From Exploitation Might Demolish Freelance Economy

The gig economy is proving to be more of a bane than a boon, at least in the European Union (EU). The EU is planning on super-sizing the workforce and has a plan to change things. A new EU plan to improve conditions for the growing number of gig economy workers could mean millions more of them are classified as employees entitled to benefits. This comes as quite a blow for digital platforms that rely on independent contractors for providing food and rides.

The EU Regulation for the Gig economy 

The European Union will consider making law this year to improve the rights of gig economy workers, as concerns grow about low pay and insecure employment. The draft rules outlined aim to clarify the labor status of people employed by app-based companies like ride-hailing service Uber and food delivery business Deliveroo and would add oversight for the algorithms they use to manage workers. Gig economy workers and platforms have fallen between the cracks of existing employment legislation, and the measures being considered by the 27-nation bloc, which would take years to come into force, are aimed at clearing up those gray areas.

Current situations, Big problems

When 28-year old Yvonne Rithner joined the Los Angeles-based gig food delivery platform Foodora in 2015, she expected to make at least minimum wage after riding her bike around the city delivering salads, pasta, smoothies, and burritos. But more than two years in, and despite logging on enough hours to qualify for health insurance under a new law in California, she makes just $5.25 an hour. After subtracting fees paid to Foodora and tips for customers, she earns $2.62 an hour on average, or “barely above the minimum wage for fast-food workers” in America’s second-largest city, according to her lawyer David Rosenfeld.…gig work’s flexibility is a selling point for many, but workers also complain that they end up making less than minimum wage after expenses or waiting time are accounted for.

If you’re self-employed, or a micro-entrepreneur as the French call it, freelancing for a company that isn’t referred to as your employer does not always give you the same protection as full-time employees, who are covered by social security. But under the EU rules, which still need approval by the European Parliament, a platform that meets at least two criteria will be deemed an “employer” and people working for that company will be reclassified as “workers” with the right to a minimum wage, paid vacation, pensions and unemployment and sickness benefits. Yet there is still some doubt about what will ultimately come of this initiative.

Silicon Valley vs European Union

Expected to be voted into law this week, the EU’s new rules on working hours have caused ripples of alarm in Silicon Valley, with some tech companies fearing they may be forced to change their business models. San Francisco-based Uber is among several “gig economy” firms that are against updated regulations that would classify drivers as “workers,” a status that comes with additional employment rights like minimum wage and sick leave.

Freelance Economy
Source: Markus Spiske

Just Eat, which operates in 25 countries including Australia, Brazil, and Japan said it “welcomes and fully supports” the proposals, which it hopes will provide companies across Europe with “clarity and a level playing field.”

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Hours, laws, and confusion.

The gig economy is big business: In Europe, ride-hailing services such as Uber or food delivery platforms like Deliveroo have gained massive popularity in recent years. But the lack of regulation for these so-called sharing apps has recently resulted in labor court cases in three European countries. While some rulings don’t go as far as saying drivers should be classified as employees or workers, they still rankle employers and their surrogates who are accused of trying to saddle them with employee rights and responsibilities.

There will be a thorough investigation on the worker’s pay and their hours that are worked out by an algorithm. This also includes making sure that there is a clear understanding between the worker and their employer.

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