On January 19, the European Parliament overwhelmingly adopted a report calling for greater protection for practitioners in the sharing economy. The resolution is not binding, but it is likely to pose a greater threat to companies such as Uber than to traditional competitors. In terms of workers' welfare, Europe is not afraid of superficial retrogression. Although it will drag down economic welfare, it is precisely this reason that makes Europe an ideal place to live and work.
Maria Joao Rodrigues, the drafter of the report, called for "decisive measures to strengthen the legal certainty of the 'employment' structure, as well as support for the work in which digital platforms play a role in the living room". She said that labor contracts with no fixed term should remain normal, and the sharing economy platform should allow all workers to have "a certain number of core working hours". When the European Parliament approved the above requirements, it strengthened its significance, and added some specific requirements in the aspect of strengthening the prudential supervision of the "zero work economy" promoted by the European Parliament. If the EU takes corresponding measures to force operators of the sharing economy platform to regard practitioners as employees, it will subvert their business model, and in some cases even make them equal to traditional companies.
1、 Mandatory employment standards
The European Court of justice is currently hearing another class of lawsuits against Uber and other similar companies: a Spanish taxi industry group believes that the US Unicorn company is only a transport company, and should apply for all necessary business licenses before entering the Spanish market. However, even if the court ruled against Uber, it would not erect enough barriers for Uber to withdraw from the European market, because the court could not prohibit Uber from employing "independent contractors" at a wage level equivalent to a small part of the cost of traditional companies. Moreover, the court's decision will not bring about much change. For example, for the deliveryman employed by British delivery company deliveroo, no license is required for delivering pizza.
However, mandatory employment standards could destroy these companies. After all, their real innovation is not the technology that they rely on that is slightly simple and easy to copy, but that they bypass labor standards and weaken competitors' ability in service prices - perhaps they can no longer subsidize services after consuming all the financing they get from investors.
At present, Uber and other similar innovators are even having problems with practices in the United States and lax labor standards. Uber found it difficult to reach an acceptable settlement with drivers who demanded better welfare conditions, with some workers being identified as employees by the help of regulators. In Europe, some companies in the sharing economy are also in trouble. In October 2016, a special labor court in London ordered Uber to identify two workers as employees and pay them according to local minimum wage standards. Uber appealed the ruling.
Deliveroo's delivery agents are also trying to form unions (sometimes easier in Europe) and get full benefits (including paid leave and minimum wage standards), so deliveroo has to take action.
2. Improve the quality of employment
However, this is a small setback compared to the possibility of European regulation as a whole focusing on a shared economic platform. If such regulations are implemented, companies that are developing "too fast" to identify practitioners as employees will be more similar to some new companies that provide temporary workers to the outside world - Mila in Switzerland and wonolo in San Francisco can legally employ their employees on loan. These companies are in industries with low technology content and slow development, so they still have a certain competitiveness compared with the industry. However, the taxi industry has basically caught up with Uber in terms of technology. For the express industry, the technical access threshold is still low.
The EU's concerns make sense. According to a paper written by Ilaria Maselli and others for the center for European Policy Studies in 2016, the proportion of temporary workers in the EU increased from 27.4% in 2012 to 32% in 2014. Although this has helped ease unemployment since the financial crisis, it is not the kind of jobs that Europe needs.
Countries with high unemployment in the European Union (10 member states have unemployment rates higher than 8%) may temporarily allow the growth of what university of Hertfordshire Professor Ursula huws calls "high tech proleat.". For the rest of Europe, improving the quality of employment (and overall quality of life) is more important than creating jobs. There is no point in doubling the number of workers who are dissatisfied with their jobs because of the precarious employment situation and the lack of income and social welfare. And those enterprises that only rely on such conditions to achieve growth, to some extent, are making the same mistakes.
