Doth the Platform Protest Too Much? Uber, Employment Status, and the EU’s Proposed Platform Work Directive

Last week, the Financial Times reported Uber’s warning that the proposed EU Platform Work Directive, if adopted in its current form, could ‘force’ the transport company to shut down its ride-hailing service in hundreds of EU cities—and to ‘raise prices by as much as 40 per cent.’ This is the second of two blog posts analysing these developments.

In an earlier OBLB post, we clarified how the Platform Work Directive would operate. Despite Uber’s remarks to the Financial Times, the proposal would not force platforms to ‘reclassify’ persons performing platform work: it does not change the criteria used to determine employment status. The focus instead is on the determination procedure—namely, changing the ‘default assumption’ to employment rather than self-employment—in order to ensure the effective enforcement of existing rules.

Nearly 7 years ago, the London Employment Tribunal found that Uber’s drivers were workers, rather than self-employed contractors. In an unusually pointed judgment (subsequently upheld by the Supreme Court), the Judge was

‘struck by the remarkable lengths to which Uber has gone in order to compel agreement with its (perhaps we should say its lawyers’) description of itself … we cannot help being reminded of Queen Gertrude’s most celebrated line: The lady doth protest too much, methinks.’

Today, we look at some of the broader implications of employment (re-)classification under the Platform Work Directive, and suggest potential further improvements to an already impressive instrument.

Platforms as employers: the intersection of labour and competition law

For over a decade, Uber and other digital labour platforms mediating location-based work have used algorithmic management to exercise control over workers while—in a range of jurisdictions—fending off claims that workers should rightfully, under existing law, be classified as employees. Occasional success in defending this position soon gave way to employment classification in some of Europe’s highest courts. As Antonio Aloisi wrote in 2022: ‘the fight over the appropriate classification of gig workers is moving into a new phase of nearly unanimous recognition of the existence of an employment relationship’—at least in the EU.

And as labour law increasingly recognises algorithmic control as an indicator of an employment relationship, competition law scholars have begun to cast a concerned look at digital labour platforms’ management strategies as well. This scrutiny has come partially through the lens of the concept of the ‘undertaking.’ In EU competition law, an undertaking should set its own prices. Some platforms, however, set prices centrally and provide limited—or no—opportunities for service providers to offer their own prices to prospective customers. From a competition law point of view, it may be difficult to argue that such service providers are independent undertakings; a distinction with far-reaching implications.

Establishing a rebuttable presumption of an employment relationship will accelerate these developments. It is therefore almost certainly in line with the Directive’s goals of reducing false self-employment among persons performing platform work, improving working conditions as well as legal certainty, and establishing a level playing field between platforms and other businesses.

Finetuning the status presumption

With trilogues now underway, discussions surrounding the eventual shape of the Directive are entering into their final phase. There are at least three aspects in which the Commission’s proposal might benefit from further fine-tuning (see also work by Kocher; Barrio; Veale et al).

Simplifying the application of the employment presumption by removing the additional ‘control criteria’

Several analysts, including German legal scholar Eva Kocher, have argued that the additional ‘control’ criteria (Art. 4(2)) needed to trigger the rebuttable presumption in the Commission’s proposal are unnecessary and may create loopholes. Kocher proposes (as indeed does the European Parliament) that these additional criteria simply be removed, and the presumption applied to all platforms meeting the Directive’s definition of ‘digital labour platform.’ This approach would likely improve legal certainty and is therefore a proposal the co-legislators should consider seriously. In the alternative, the final text could alternatively clarify that it is not for a person performing work to prove that a platform meets the criteria, but for the platform to prove it does not.

Assessing the need to regulate lead firms’ power in supply networks—in digital labour platforms and beyond

In the FT coverage, Uber’s spokesperson noted that in Germany and Spain, drivers are already employed—not by Uber, but rather by ‘third-party’ employers. These practices merit close analysis for their effects on working conditions; for their consistency with the policy objectives of relevant legislation (including the Platform Work Directive itself); and for their compliance with EU competition law.

If third-party employers serve mainly one client firm, have no or limited other potential customers, and take prices from the lead firm with little possibility to negotiate over prices or the details of the provided services, they may effectively constitute a single undertaking along with the lead firm (ie, the platform). Careful empirical and legal analysis is therefore needed to assess whether some ‘employer functions’ are in practice being performed by the lead firm, and whether the ‘employer responsibilities’ should therefore attach to that entity rather than the nominal employer. If necessary, the legislator should consider drafting further rules to ensure that the lead firms in ‘platform-based supply networks’ fulfil their responsibilities. The recently enacted German Supply Chain Act could offer some inspiration in this regard.

Ensuring that the definition of ‘digital labour platform’ includes all digital labour platforms

Third and finally, the co-legislators should carefully examine the definition of ‘digital labour platform’ (Art 2), as well as the related Recitals (eg, Recital 18), to ensure that all types of digital labour platforms are included within the Directive’s scope of application.

* * *

Regulation is a reality of modern business—in the European Union and beyond. A ‘sincere […] commit[ment] to the European social model’ is incompatible with attempts to craft exemptions from basic elements of that very model, including in particular the responsibilities of employers. The Union’s co-legislators should continue the tradition begun with GDPR and avoid the trap of falling for narratives of technological exceptionalism—especially where the underlying claims do not stand up to detailed legal and economic scrutiny.

M Six Silberman is a Postdoctoral Researcher at the Bonavero Institute of Human Rights of the University of Oxford.

Jeremias Adams-Prassl is Professor of Law at the University of Oxford and a Fellow of Magdalen College.

Halefom Abraha is a Postdoctoral Researcher at the Bonavero Institute of Human Rights of the University of Oxford.

Sangh Rakshita is a Researcher at the Bonavero Institute of Human Rights of the University of Oxford.