Food delivery and ride-hailing apps will have to spend billions of dollars under the European Union’s plan

Up to 4.1 million people working through ride-hailing and food delivery apps could be reclassified as employees under an upcoming European Union plan to improve the labor rights of contract workers. copper.

The draft proposal could cost the sector an additional 4.5 billion euros ($5.1 billion) a year, according to Bloomberg estimates. It will likely add millions of workers to companies like Uber Technologies Inc., Deliveroo PLC and Bolt Technology OU with access to minimum wages and legal protections. Another 3.8 million workers will receive confirmation that they are self-employed.

Shares of Deliveroo were down as much as 5.6% in early Friday trading, while Delivery Hero SE was down 2.7%.
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Digital platforms are resisting the commission’s proposal, which they say will lead to massive job losses. Earlier this year, Spain classified food delivery workers as delivery people, prompting Deliveroo to withdraw from the country and other food delivery apps to reduce their operations.

In a risk assessment, the European Commission wrote that job losses could not be calculated and that the rule changes could “negatively affect” worker flexibility. The rules are also likely to increase the cost of delivery and drive-in apps, as the EU executive noted that “consumers could face a share of the increased costs of the platform.

The bloc’s executive board said the proposals were judged to be the most effective way to improve conditions for workers and help them access social protection measures. Member states can receive around 4 billion euros in taxes and social security contributions increase every year.

Under the proposed rules, which are expected to be made public next week, any worker whose job is controlled by the digital platform can claim to be an employee regardless of their status. called in their contract. Digital platforms will have a legal obligation to prove that workers are not employees.

The rules will affect activities that meet two of five criteria: determining wages for workers, setting standards of appearance and conduct, monitoring work quality, limiting ability accept or decline assignments or limit your ability to build a customer base.

The Commission will present its proposal next week and still needs to garner support from EU countries and the European Parliament before it becomes law. Food delivery and ride-hailing apps will have to spend billions of dollars under the European Union’s plan

Aila Slisco

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