Uber Eats, Peers Given Deadline to Abandon Gig-Worker Model in Spain -- Update
--Uber Eats, Deliveroo and other food-delivery platforms have
three months to move Spanish couriers onto contracts
--Spain's law is the strictest yet in Europe and could be an
important precedent for EU-wide legislation on the gig economy
--The most likely solution for companies will be subcontracting
via third-party fleets, which could raise costs
By Adam Clark
Uber Technologies Inc. and other operators of food-delivery
platforms in Spain have three months to change their current
gig-labor models, the Spanish government said on Tuesday.
Ministers approved a law to regulate the employment conditions
of delivery workers who work via digital platforms such as Uber
Eats or Amazon.com Inc.-backed Deliveroo PLC. The approval begins a
countdown for companies to convert their workers from independent
contractors into employees by mid-August.
The new regulations could be an important precedent as the
European Union is consulting on rules on platform work across the
bloc this year. Uber, Deliveroo and local delivery startup
Glovoapp23 SL had campaigned for a deal which would avoid
reclassification of workers, similar to arrangements reached in
France, arguing the majority of couriers would prefer to be
Yolanda Diaz, the minister of Labor, said Spain would be the
first country to pass such legislation but added that the
government had held recent talks on the topic with counterparts in
Italy and Portugal.
"Europe is watching us with close attention," she said, also
noting that President Biden has said the U.S. could legislate in
similar areas. Last month, U.S. Secretary of Labor Marty Walsh said
many gig workers should be classified as employees.
"This regulation will directly hurt thousands of couriers who
use food delivery apps for much-needed flexible earnings
opportunities and made it clear they do not want to be classified
as employees. It will also impact Spanish restaurants that
increasingly rely on delivery solutions to make ends meet," a
spokesperson for Uber said.
Courier groups in favor of maintaining self-employed status
organized protests in various Spanish cities on Tuesday but unions
welcomed the law and said similar regulations should be extended in
other areas of the digital economy and across Europe.
The companies will now have to consider how to implement the
changes to their business models. An estimated 30,000 couriers
currently work with food-delivery platforms in Spain, often working
for multiple companies. Couriers' groups said the most likely
solution will be for the companies to subcontract workers via
The subcontracting model is already used by major European
food-delivery platform Just Eat Takeaway.com NV but would likely
result in relatively higher costs for Uber and Deliveroo, which
have a greater proportion of restaurant deals where they handle the
logistics of delivery. Uber said last month that it would use
fleet-management companies for the planned expansion of its Uber
Eats service to Germany.
"We want to be a long-term partner to Spain and are exploring
different options to adapt our delivery business to the new
regulation," the spokesperson for Uber said.
Write to Adam Clark at email@example.com
(END) Dow Jones Newswires
May 11, 2021 10:20 ET (14:20 GMT)
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