The GIG economic times for the EU: on our way to a more socially proactive Union
Updated: May 11, 2022
Thirty years have gone by since the city where we find ourselves, Maastricht, witnessed the birth of the European Union (EU), bringing with it Union citizenship and its guaranteed rights. The establishment of the EU as one voice of cooperation between European states was a groundbreaking international agreement on a continent that, historically, was not very used to teamwork. All of a sudden, a European identity started to emerge alongside an increasingly integrated market and a new reality of rights and duties for EU citizens.
The EU constitutes, in the history of the European continent, an achievement in terms of interstate harmony, citizen wellbeing and economic progress. Despite such statements being always contentious, the positive outcomes of the EU have been increasingly visible across Europe. Yet, directly seeing the benefits of the Union as infallible would be too fast of an assessment. Let me dive into this. Despite the overarching successes of continental peace and economic integration, the latter having allowed less economically prosperous countries to benefit from increasing investment and trade, vast socioeconomic differences are still latent among Member States. Cohesion is anything but an easy journey for countries with diverse historic, economic and social structural traits. Such diversity makes up the uniqueness of the EU, but also its arduous pursuit of consensus.
Let’s try to make sense of the Union’s alleged achievements. Is the functioning internal market one? Are the four freedoms a more relevant achievement? What about the monetary union? And the existence of European elections, the role of the EU institutions or the legal protection offered by the progressively developed Union law? The often silent omnipresence of the European Union is one of the reasons why making sense of it as an entity affecting our daily lives can be challenging. This often makes it harder to believe that the Union is actually more than a mere economic project of a few profit-driven people in formal attire. In this sense, building up an institutional social dimension has long been the core challenge the EU faces, implying a long way ahead before it becomes an enjoyable achievement.
Globally though, economies until now driven by liberalized markets and little attention to its societal consequences are heading towards more socially conscious systems. The European Union is no exception. Letting the market be by deregulating it and compensating its flaws is part of the past, actively boosting a social economy starts to be the leading tendency of the EU. The ‘socially frigid economism’ of the EU started to transform with the Lisbon Treaty in 2009 and its wider social focus, followed by the European Pillar of Social Rights (EPSR) eight years later and a recent Action Plan to implement the latter. For those not familiarized with it, the EPSR was born under the Commission’s initiative precisely to materialize and expand the social dimension of the EU. This apparent interest of the EU in becoming a more socially active entity is not arbitrary but a reaction to the dynamic economic and social changes brought about 30 years ago by globalization and increasing digitalisation. These have changed the way we live, consume and prominently the way we work. Labor markets have undergone significant changes in the recent decades, often not in favor of workers themselves. Low-waged and low-skilled jobs have dramatically increased. Sustaining these, the gig economy stands out as the sector that has transformed the nature of global labor markets and the traditional notion of a worker not necessarily for the good.
Noémi is twenty two years-old. She worked for an online food-delivery platform in Maastricht for five months until she realized she could find a better paid, safer and less algorithmically-dependent job. Platform labor has become the heart of gig economies. These are temporary jobs where independent workers are hired for a short-term commitment. While this does not look too bad on paper, reality has proven that the gig economy needs regulation as employees have fallen into a trap of unprotection and lack of basic labor rights. The why is simple. Employers claim not to be employers as the workers are in principle self-employed, making it hard to derive accountability from the company to protect workers’ rights and ensure proper working conditions. And while gig workers span across many economic services, food delivery has been one of the most distinguished.
Hastily increasing in recent years, food delivery platforms relied upon 28 million workers across the EU by the end of 2021. Innovative, (arguably) needed, but above all unregulated. Thus, when the boom of digital platform labor started unveiling the poor working conditions and scarce protection workers in the sector have been subject to, Member States were forced to respond. Yet, they enjoy a cautious discretion that results in a jeopardized and divergent response to a pan-European problem. This shows that the lack of a regulatory framework at EU level concerning platform employers of the gig economy may result in workers risking their basic rights in a region of the world that claims to stand for social justice before economic profit. Going back to the Union’s achievements, it is easy to see such a reality likely to undermine a few of them.
To begin with, during Noémi’s job interview, the company never clarified what her working status was, whether she was entitled to a minimum wage, the type of social protection she could receive or advice on the challenges she would be facing as a rider. Once involved, she saw herself immersed in a gamified job where an algorithm allocated the orders she needed to cover and rewarded her according to her fulfillments. If she was too slow, she missed the order and thus lost the ‘bonus’, but also her time and energy. Even if she was fast enough, Noémi sometimes faced customers who did not always treat her respectfully and the company didn’t have her back. If she did not receive any orders, she waited for an unspecified amount of time at the mercy of the algorithm’s will until an order popped up in the system. Regardless how short the waiting time was, that time was never paid. When it comes to the ‘flexibility’ the company boasted about, the reality was working shifts she was forced to take. When orders popped up from Kanne, in Belgium, she crossed a border she was barely aware of, making an already complicated job even more legally complex. Who would have dealt with an accident or a crime against her in that situation? This uncertainty and loss of agency is not where it ended either. Noémi, like many in the gig economy, had to bear all the costs of the vehicle, the risks of having an accident and dealing with customers herself, not being afforded the regular protections of an employee in other sectors.
The criteria to be an employee in the Netherlands diverges from that of other Member States, making the employment relationship a gray legal sphere where companies can easily take advantage of their employees. Being an employee implies working under someone else’s authority and regulation in exchange for remuneration. Is an algorithmic regulation of the job sufficient to guarantee accountability of exploitation by these companies? Why is a food delivery company that operates across borders subject to national legislation and not to one at the EU level? These loopholes through which companies such as Uber Eats, Deliveroo, Thuisbezorgd and other platforms make their ways lead the gig economic times of the EU. Action at European level is thus justified to ensure the safety, protection and stability of workers. While the Commission took some time, by the end of 2021 it drafted a Directive aiming to regulate platform labor and avoid the case-by-case nature of dealing with the issue. Specifically, the Directive would ensure the right employment status of platform workers, a fair and accountable algorithmic management with an increased traceability and transparency of developments in the sector.
So does this imply the EU is doing enough to protect Union workers? The Directive might be a steady protocolary step to start solving the problem, but the procedural burdens it needs to face until it becomes effective might not play in anyone’s favor. It can take up to two years for the proposal to be approved. But that’s not all, approval implies another two years of margin for Member States to transpose it to national law, let alone the discretion they enjoy in the way they implement the Directive. This lengthy and slow-paced process EU legislation needs to go through tends to restrain the overall effectiveness of the action. If we consider the urgent situation of platform workers as of today and envisage a worst-case scenario of 4 years until the Directive is fully implemented across the EU, the problem is clear. Time is a luxury the EU cannot afford, in current but also in future challenges posed to the labor market. Arguably, the EU’s reactive, rather than proactive, attitude towards crisis solving may result in the undermining of millions of workers’ rights.
Fortunately, resorting to faster ways to get things done outside of the usual procedures do exist, by using delegated acts that modify existing legislation, for example. Yet, difficulties tend to flourish from the same root: the consensus-driven nature of the EU where agreement between counterparts is another high-priced luxury for the entity. Therefore, if looking beyond legislative choices, the EU should and is able to adopt a more proactive stance that transforms platform work into a democratic, fair, and inclusive sector. In this sense, the EU may start considering new ways to promote, via public funding and support, alternative platforms based on cooperative business models and clear status of employment. At the same time, Member States should soon recognise that working for common social goals is essential amidst the integration of their economies. By doing so, they will voluntarily seek faster legislative cohesion and further cooperation in social domains, which aligns after all with the genuine objectives the EU pursues. It is then the turn of both to act in harmony so as to give a sustainable solution to the flaws of the gig economy, yet it is largely the task of the EU to restructure its priorities and become a more proactive social institution rather than a mere servant of the single market.