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Uber, Gig Companies Seek Labor Deals to Avoid Workers Becoming Employees

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BARCELONA—Gig-economy companies in Europe, under pressure over employment rights, are looking to strike labor agreements that give workers some benefits but stop short of making them employees.

Uber Technologies Inc.


UBER 0.58%

and Amazon.com Inc.-backed Deliveroo are among a number of food-delivery businesses seeking to secure deals with workers and unions in the hope of averting legislation that could force them to treat delivery drivers as employees, potentially upending their business models.

The effort follows several legal judgements across Europe challenging the companies’ view that drivers and couriers are independent contractors.

In the U.K., Uber is appealing to the Supreme Court to overturn an earlier decision that drivers using its app effectively work for the company, while Swiss courts have forced Uber Eats to stop using independent contractors in the Geneva area. Instead it has started using third-party employees, a first for the company.

An Uber Eats rider collects an order in London, where the company is fighting a legal decision that effectively classified its workers as employees.



Photo:

Dave Rushen/Zuma Press

Gig-economy companies say reclassifying workers as employees would add to costs, reduce workers’ flexibility and result in lost jobs. Following the Geneva move, Uber said only 300 couriers were given contracts, costing 1,000 others their jobs.

Instead the companies are championing a recent labor agreement with a small right-wing union in Italy as an alternative. Under a deal agreed in September, a group of companies including Uber and Deliveroo promised couriers in Italy €10 per hour spent making deliveries, equivalent to about $12, as well as equipment and insurance. That’s above the typical €7 an hour minimum wage but comes without holiday pay or sick leave.

The companies struck the deal, which covers all of their food-delivery workers in the country, after the Italian government threatened to regulate the sector. The companies say the deal doesn’t add to costs for their customers.

Larger unions have said the deal leaves workers worse off than if they were treated as employees, but it remains in force. The companies say they are interested in pursuing similar arrangements elsewhere, including in France and Spain.

While Uber and

Lyft Inc.

offered drivers in California modest benefits after winning a state vote to keep workers as independent contractors, the Italian deal goes further by introducing collective bargaining for independent contractors.

President-elect

Joe Biden

has said he wants to introduce collective bargaining for contractors, and the Independent Drivers Guild—a New York-based drivers’ group—called for states to offer such arrangements to gig workers following the California vote.

In Europe, the next battleground is Spain, where the government hopes to finalize a new gig-economy law in the coming weeks. The companies are pushing an Italy-style deal that would avoid workers being reclassified as employees.

The industry also backed government proposals in France to introduce charters of agreed working conditions, while ruling out full employment rights.

“We do believe gig workers should have access to more social rights but not necessarily under a strict labor regime,” said

Sacha Michaud,

cofounder of Barcelona-based delivery app Glovoapp23 SL, which operates as Glovo across Europe and in parts of Africa.

In Spain, Glovo, Deliveroo and Uber say they are willing to offer workers a deal that would pay minimum rates—plus bonuses for working in bad weather—but doesn’t include benefits such as paid vacation.

Deliveroo said it wanted to improve social protections for workers in Spain and elsewhere, without risking their flexibility.

Delivery workers gather for a June labor-rights protest in Malaga, Spain.



Photo:

Jesus Merida/Zuma Press

Some delivery drivers are supporting the companies’ efforts in Spain.

“We want to work as independent contractors and have the flexibility to work as many hours as we want,” said

Badr Eddine Hilali,

head of the Asociación Autónoma de Riders (Autonomous Riders’ Association), a couriers’ group that works with the platform companies. “A contract of 40 or 30 or 20 hours doesn’t interest me.”

Others say the companies pose a false choice between flexibility and employment.

“The Italian model is what the companies want because it offers them more benefits and less for the workers,” said

Dani Gutierrez,

a spokesman for Riders X Derechos (Riders for Rights), an independent couriers’ group that supports employment status for couriers.

“‘Flexibility’ is what they say you have. We don’t work when we want, we work when they let us, which is very different,” Mr. Gutierrez said, referring to the lack of guaranteed minimum work and the pressure to work evenings and weekends.

Gig-economy companies in Europe may struggle to avoid their workers being classified as employees unless they change their methods of control, including providing more transparency around their algorithms and financial data on the costs of employment, said

Valerio De Stefano,

a labor-law professor at the Belgian university KU Leuven.

European countries often have labor protections incorporated at a constitutional level, which could hamper efforts to carve out a new category of independent contractors in the law, he said.

Mr. De Stefano also suggested that legislation in Europe could have an impact in the U.S.

“If you have all of Europe treating gig workers as employees, it will be difficult for U.S. lawmakers not to at least wonder whether to intervene,” he said.

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Gig worker rights battle moves to Toronto

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The battle for gig worker rights has come to Canada, where the Canadian Union of Postal Workers (CUPW) has launched the Gig Workers United campaign. It is the latest in the global movement to increase wages and improve working conditions for gig workers who rely on app-based companies for employment.

“We have to stand up for ourselves — the streets don’t look out for us, the apps don’t look out for us, so we’re looking out for each other and collectively calling out a bad business model,” Narada Kiondo, one of the courier spokespersons for Gig Workers United, said in a statement announcing the organizing effort. “The way it is just can’t continue — if the gig economy is going to work for our society then it can’t be based on squeezing delivery workers and restaurants for profit and dodging our labor standards. And we’re going to persist, and we’ll win, because our bodies and our livelihoods are on the line.”

The roots of the organizing effort were in a similar effort two years ago. The Justice for Foodora Couriers worked to unionize delivery app Foodora couriers. The German company expanded to Canada in 2015. Foodora claimed that couriers were independent contractors and not entitled to form a union. On March 4, 2020, the Ontario Labor Relations Board ruled that Foodora couriers were “dependent contractors” and therefore could unionize.

On April 27, 2020, Foodora announced it was closing its Canadian operations.

Jan Simpson, national president of CUPW, said the lessons from the Foodora fight are that gig workers have rights to unionize.

“The couriers have shown that traditional union organizing is possible in this space. But they’ve gone farther than that, with community-organizing tactics and collective mutual aid. They’ve formed a worker-led organization that we’re proud to support because their fresh energy and ideas are what it takes to improve working conditions and reject Silicon Valley’s model of exploitation,” Simpson said in a statement.

The battle for gig worker rights is expanding across the globe. Earlier this month, a court in the U.K. ruled Uber Technologies (NYSE: UBER) drivers in London were entitled to minimum wage, essentially making them employees. Uber had appealed a lower court ruling, but the U.K. Supreme Court rejected its argument, saying it was “clear … that claimant drivers were workers who worked for Uber London under ‘worker’s contracts.’” It also said the fact that an Uber driver could turn down work “is not fatal to a finding that the individual is an employee … and does not preclude a finding that the individual is employed under a worker’s contract.”

Read: Prop 22 wins in California; takes Uber, Lyft and other drivers out from under AB5

The nature of the relationship between Uber and its drivers means that the drivers “have little or no ability to improve their economic position through professional or entrepreneurial skill,” the court wrote. “In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”

In the U.S., much of the fight over the status of gig drivers has taken place in California, where voters passed Proposition 22 in November with 58% of the vote. Prop 22 removed Uber, Lyft, DoorDash and other gig drivers from compliance with Assembly Bill 5 (AB5). That bill required companies to treat the drivers as employees.

Prop 22 did include certain provisions for drivers, including new earnings guarantees and health-care stipends among others, but it allows the gig workers to remain independent.

Click for more FreightWaves articles by Brian Straight.

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African fintech startup ImaliPay raises pre-seed funding to service gig economy

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ImaliPay, an African-based fintech start-up is making waves by reshaping the future of work in the gig economy.

The Australian venture capital firm TEN13 reputed for investing in top-tier start-ups has invested an undisclosed amount of pre-seed funding in ImaliPay. ImaliPay joins TEN13’s growing fintech portfolio; the likes of Chipper Cash and Bookipi. Other investors included in the raise are; Finca Ventures, Optimiser Foundation, Mercycorps Ventures, Changecom, and super angels from Norway, Nigeria, UK, and Kenya. The primary aim of the investment is to expand and accelerate its growth and footprint in Kenya, Nigeria, and South Africa to be the one-stop-shop for gig workers’ financial needs.

TEN13’s backing of ImaliPay follows a recent string of events that has elevated the visibility of Africa’s Fintech start-up scene. “We believe this is a perfect opportunity to introduce our growing international network of investment professionals and investors to one of the most exciting emerging Fintech companies in Africa, ” said TEN13 Managing Partner, Stew Glynn.

The growth in the African gig workforce is being propelled by the growth in digitisation and smartphone penetration. Gig workers constitute a significant proportion of the economy within ImaliPay’s target markets and this market segment is expected to grow rapidly over the next decade. ImaliPay offers gig workers a one-stop-shop of financial services such as the ability to seamlessly save their income and receive in-kind loans through a “buy now, pay later” model tied to their trade. Bolt drivers in Kenya can now request a fuel loan and payback after 3-4 days, this allows them to get more work done and Safeboda riders in Nigeria can now buy on credit bike parts, fuel, and smartphones to keep their gig moving and reduce any downtime. Other products to be offered off the platform include insurance and investment options to foster a safety net for this hard-working but vulnerable part of the population.

ImaliPay was co-founded in 2020 by Zimbabwean Tatenda Furusa and Nigerian Sanmi Akinmusire who met whilst working at leading payments company Cellulant. They believe the backing of the start-up by a notable venture capital company such as TEN13 has tremendous benefits. “It’s a great opportunity for investors to participate in the fintech revolution and a fast-growing segment. Our vision at ImaliPay is to advance financial health and inclusion for gig workers who struggle to manage and access flexible financial services that are often only available to traditional SMEs”, said Furusa.

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EU seeks views on gig workers’ rights ahead of possible law

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By Foo Yun Chee

BRUSSELS (Reuters) – The European Commission on Wednesday took a step towards improving the rights of gig economy workers with the launch of a public consultation to determine their legal employment status and how to improve their working conditions.

Lockdowns to contain the COVID-19 pandemic have increased demand for casual workers as food deliverers have hired drivers, while cleaners, needed to battle the spread of infection, have faced health and safety risks.

Courts and regulators have meanwhile sought to correct the shortcomings in the gig economy.

The UK Supreme Court ruled last week that Uber drivers are entitled to workers’ rights, such as the minimum wage, and a Spanish court said in September that riders for Barcelona-based food delivery app Glovo were employees, not freelancers.

The EU executive said it wants feedback from trade unions and employers’ groups during the six-week consultation. A subsequent consultation will look into the content of a possible law by the end of the year unless unions and employers decide to negotiate the issue themselves.

“There is no going back as to how things work. The platform economy is here to stay, new technology, new sources of knowledge, new forms of work will shape the world in the years ahead,” the Commission’s digital chief Margrethe Vestager told a news conference.

“These are new opportunities that must not come with different rights, online as well as offline. All people should be protected and allowed and enabled to work safely and with dignity,” she said.

The consultation listed seven areas for possible improvement – the employment status of gig workers, their working conditions, access to social protection, access to collective representation and bargaining, cross-border aspects, the companies’ use of algorithmic management and training and professional opportunities.

Uber said it would work with policymakers and social groups on the proposal.

“Any legislative initiative should be grounded in what platform workers value most – flexibility and control over their work, transparent and fair earnings, access to benefits and protections, and meaningful representation,” the company said in a statement.

Small companies lobbying group SME Connect urged the Commission to expand the consultation to other groups.

“Looking at these issues solely through the prism of employees/employers’ organisations risks a failure to account for these platforms and those who work on them,” its president Paul Rübig wrote in a letter to Vestager.

(Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Barbara Lewis)

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