Europe is witnessing a downturn in the “gig economy” and may face a rise in prices

Europe is witnessing a downturn in the "gig economy" and may face a rise in prices

Companies’Economy gig“, As they are called.” UberAnd the Deliveroo e Just eat takeaway, Showed a decrease in sales due to the new rules in Europe. The consumer may end up paying the price in the future. Literally.

On its stock market debut, British food delivery company Deliveroo saw paper prices drop nearly 30% as questions about workers’ rights began to arise.

In recent weeks, the industry has been rocked by a series of court rulings and regulatory moves across Europe that could eventually become the business model.

Uber begins the ‘gig economy’ revolution

Uber’s loss to the UK Supreme Court last month forced the company to reclassify 70,000 of its British drivers as workers, granting them minimum wages, paid vacation and pension plans as a result.

In Spain, lawmakers have introduced a series of measures that have reclassified gig workers as official contract and benefit employees.

At the same time, the European Commission, the executive arm of the European Union, is laying out plans for some kind of regional reform for workers in that economic arm, to change their status and rights.

James Farrar, of the Association of Drivers and Couriers Applications, which brought the case against Uber in the UK, said there had been some “initial victory”, but that this was just the beginning of a shift in workers’ rights in the gigantic economy.

“We’re still at the lowest point here, and we’re not there yet,” he told CNBC.

“I think what was really important about the Supreme Court ruling was that it cleared the way for other claims via the gig economy to work.”

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Companies are preparing

Other firms prepare for change in some way, either at the instigation of regulation or willingly in advance.

Just Eat Takeaway, the largest European online food delivery company, is converting Just Eat delivery users into employment contracts. Before the companies merger, the pilots of the original company, called Takeaway.com, had these contracts.

“As part of this model, couriers are entitled to one hour of work, are paid above the minimum wage, and have employment and social insurance, in accordance with local legislation,” a spokesperson said, adding that couriers receive equipment such as bicycles.

In Spain’s case, market operators like Glovo are waiting to see exactly how legislation will work and how it responds.

Co-founder Sasha Michaud is not a fan of the path Spanish lawmakers have taken.

“It’s a very strict regulation, and it is probably the most stringent (in Europe), so it is a very radical position in the sense that it allows for very little flexibility, which is one of the things that we clearly adhere to, and the pilots are asking for that, well,” he said Mechaud for CNBC.

Michaud said Glovo will “clearly adjust to the regulation” when it goes into effect, but said the company favors a compromise between flexibility of workers and providing benefits and security, while avoiding business etiquette.

He added that surveys of Glovo pilots showed that most of them prefer a flexible model over stiffer jobs. He said he assists many pilots who may work for runways between their studies or other jobs.

“They have to be social rights, yeah, and we see how we can maintain flexible working conditions under this. They don’t have to be black or white.”

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This medium refers to Prop 22 in California, which was approved last November and supported by Uber and Lyft.

It’s an approach Uber would like to replicate in Europe. In February, CEO Dara Khosrowshahi published a document urging the European Commission to follow a hybrid model, such as the California model.

The consumer will pay the temporary jobs economy bill

Changes in the organizational position of the workers will introduce a number of new costs. This will also be fresh on the minds of smaller startups in the space.

John Ryan, of the UK startup Gigable, which connects restaurants and other businesses with freelancers, said consumers could end up feeling the impact of higher prices.

“But I think people are comfortable enough with the prices going up if they know it’s going to the drivers or if there is public support for a change, but that’s not clear yet,” Ryan said.

He added that the flexible model may be suitable for some workers, and others prefer the traditional employment.

“We will see how difficult it is for people to fulfill their obligations.”

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About the Author: Camelia Kirk

"Friendly zombie guru. Avid pop culture scholar. Freelance travel geek. Wannabe troublemaker. Coffee specialist."

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