Startup Life/Hiring & Workforce/Analysis/ Gig economy rules around Europe: what startups need to know Big change is coming to the way gig economy companies do business in Europe. Companies have a patchwork of laws to navigate By Tim Smith 26 January 2022 \Venture Capital How VCs' lack of succession planning is leaving big firms without a future By Mimi Billing 27 January 2023 Startup Life/Hiring & Workforce/Analysis/ Gig economy rules around Europe: what startups need to know Big change is coming to the way gig economy companies do business in Europe. Companies have a patchwork of laws to navigate By Tim Smith 26 January 2022 The gig economy has created some of tech’s fastest-growing companies in the last decade. Uber, Deliveroo, Bolt, Cabify and Glovo have all benefited from using self-employed couriers and drivers to grow their networks, without taking on the substantial cost of employing those workers. Now, in response to a considerable backlash around pay and workers’ rights, regulators and courts around Europe are drawing up new rules for the gig economy. Here’s a breakdown of the crucial ones to be aware of, with a focus on EU policy, and the countries where courts and governments have made big decisions on platform work. In general it’s a real patchwork, with many contradictory rulings — even within the same country (we’re looking at you, Britain). If you want the green light for your gig economy startup, Belgium currently seems like the simplest bet. But even in countries like Spain where the government has clearly ruled that gig workers are employees, there are easy ways to bypass the legislation. EU level — from 2024 you are legally an employer unless you can prove otherwise In December 2021 the EU published its landmark plan for regulating the gig economy. It marks a big departure from the US’s approach to regulation, setting out to “ensure that people working through digital labour platforms can enjoy the labour rights and social benefits they are entitled to”. The proposed measures won’t be enforced until at least 2024, but spell big changes for gig platforms operating in Europe. Until now, it has been up to drivers and couriers to prove that they are not self-employed in the courts. The new EU directive will shift the burden onto companies to prove that workers are not employees. Member states will be required to copy this into national law. The EU measures set out five criteria that demonstrate an employer-employee relationship, which it defines as the company “controlling the performance” of work or a worker. The company will be legally seen as an employer if it is deemed to control or supervise two of the following five areas: rate of pay; personal appearance or conduct; the quality of the work; working hours; and ability to work for other companies. Spain — getting around ‘Riders’ Law’ through subcontracting firms Spain was the first European country to regulate the gig economy with national legislation, which was signed in August 2021. The so-called Riders’ Law established a “presumption of employment” between platforms and couriers. In reality, it seems that companies get around the law by using subcontracting firms to avoid employing riders directly. Barcelona-based Glovo planned to hire just 2,000 of its workforce of 12,000 by the end of 2021, keeping the rest on as casual labour via subcontracting agencies. Portugal — law in limbo In October 2021 the Portuguese government approved a bill which would force gig platforms to employ couriers and drivers. Inconveniently, the Portuguese parliament was dissolved just a couple of weeks later after the governing Socialist Party failed to pass its budget, meaning the law is still awaiting parliamentary approval. Italy — tweaking safety and privacy but employment rules still unclear In February 2021, Milan prosecutors and the Italian Labour Inspectorate jointly issued a €733m fine to the country’s four major food delivery platforms (Just Eat, Uber Eats, Glovo and Deliveroo) for violating employment safety laws. At the time, the companies were also ordered to fully hire workers who were self-employed. By December the fines were reduced to €15,700 per company, but the delivery platforms were obliged to give riders safety training and equipment, as well as medical exams. No mention of the riders’ employment status was made in the December announcement. Separately, in July 2021 Italy’s data protection regulator ordered delivery platform Foodinho to change its algorithm for managing staff. It’s reported that the regulator found breaches of privacy and labour laws in the company’s data usage. Greece — people power Greece is one European country bucking the trend of trying to make gig workers employees. In June 2021 the country’s centre-right government signed a new labour law which makes it easier for gig platforms to hire workers on a self-employed basis. In September 2021 eFood, the country’s largest food delivery platform (the local subsidiary of Delivery Hero), tried to force 115 of its workers who were on three-month contracts to become self-employed. It triggered a wave of strikes and the company was pressured into offering all 2,016 of its workers on three-month contracts a new deal with full employment. United Kingdom — conflicting rulings for taxis vs food deliveries While the UK government is yet to draw up laws on the gig economy, the country’s supreme court ruled in February 2021 that Uber drivers should be classed as workers. Uber agreed to give its drivers holiday pay, pension contributions and a set hourly wage. Food courier companies, meanwhile, continue to operate on a gig economy, self-employed model. Deliveroo won a case in the UK court of appeal in June 2021, in a ruling that said its couriers are self-employed. France — watch the criminal case Deliveroo is facing France’s parliament has, so far, opted against legislating on gig economy labour, leaving decisions on self-employment to the country’s employment courts. In February 2020 a Paris labour court found Deliveroo guilty of benefitting from “undeclared work”, but the company overturned the decision on appeal. Now, three former directors from Deliveroo France are being summoned to a criminal court to answer charges of not declaring jobs at the company. The hearing is expected to take start on March 8. In March 2020, France’s supreme court also ruled that an Uber driver was an employee. Belgium — delivery riders are NOT employees Belgian gig economy campaigners were dealt a blow in December 2021, when a court denied Deliveroo riders the right to employment status. The Netherlands — Uber drivers ARE employees In September 2021 an Amsterdam court ruled that Uber drivers are covered by the “collective labour agreement for taxi transportation”, meaning they are employees of a taxi company. Uber has said it will appeal the ruling. Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith Related Articles Women vs. men: Salary expectations at startups By Amy Lewin Click here to read more Totem: A new twist in the food delivery space By Amy Lewin Click here to read more How can your startup hire abroad through an Employer of Record (EoR)? Sponsored by WorkMotion Click here to read more Why this US investor is on the hunt for European founders By Ryan Floyd Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? 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