Companies such as Uber Eats, Amazon, UPS and Deliveroo made record profits during the pandemic. Their workers were underpaid and overworked. The rights of these platform workers are now being strengthened by the EU’s proposed “Platform Work Directive”. This Directive will protect workers in the gig economy by regulating their employment status and providing protections and transparency.
Daniella Vanova, 27 September 2023
Algorithmic management could be the key ingredient in the future of work. Initially, algorithmic management platforms were created to automate functions that were stressful and tedious for workers. Digital platforms evolved from a niche market in manufacturing, software engineering, marketing, consulting, and the public sector. With its advantages and disadvantages, what was once a helpful tool has also become a harmful control mechanism through “bossware” for many workers reliant on these platforms.
Currently, the European Commission estimates that 28 million EU citizens perform platform work duties in the EU, of which six million are on-location, and the rest are online. This growing phenomenon is estimated to affect 45 million citizens working on digital platforms by 2025. Although algorithmic management can automate human tasks, critics highlight the increasing lack of transparency, lack of human oversight, and unfair practices.
The European Union (EU) has proposed a new directive “The Platform Work Directive” to regulate the rights and interests of platform workers by introducing new governing mechanisms and to ensure the correct implementation of the General Data Protection Regulation (GDPR) by these platforms. The Platform Workers’ Directive has three broad policy aims 1) to establish a rebuttable presumption of employment status; 2.) to provide minimum protections to platform workers; and 3.) to provide transparency and fairness when an algorithm manages platform workers.
Investopedia.com defines the gig economy as “a segment of the service economy based on flexible, temporary, or freelance jobs, often involving connecting clients and customers through an online platform.” The EU initiative will affect various industries and make the day-to-day lives of platform workers in the gig economy easier with more rights and protections.
The Directive was adopted by the European Council on 12 June 2023. The next steps are negotiations with the European Parliament before it becomes law. Once it passes, Member States will likely have two years to implement it. Workers’ rights will be strengthened by ensuring a correct determination of employment status for people working through digital platforms and by establishing the first EU rules on the use of AI in the workplace.
During the COVID-19 global pandemic, Amazon, eBay, Uber, Deliveroo, and Airbnb made record profits and expanded their businesses. Workers in these industries do not traditionally have an employment relationship. The EU Directive will combat these cases of misclassification.
According to the press release of the Council “workers will be legally presumed to be employees of a digital platform (as opposed to self-employed) if their relationship with the platform fulfils at least three of the seven criteria set out in the directive. These criteria include: upper limits on the amount of money workers can receive; restrictions on their ability to turn down work; and rules governing their appearance or conduct.” When the presumption applies, the burden of proof will now lie with the digital platform to prove that the no employment relationship exists according to national law and practice.
In the modern gig economy, there are three actors: digital platforms, workers, and end-users. These adhere to two types of working locations: online and on-location. Most workers, when using algorithmic management, find their day-to-day work less stressful. The algorithm provides more autonomy and flexibility, and above all, effective task allocation. However, like everything automated, it has its advantages and disadvantages. Advantages include extracting and using large files of real-time data which algorithms can execute at a faster pace.
Today, algorithmic management can improve the speed and scale of processing information and help maximize organizational performance. For example, it can better pair workers with tasks and reduce bias in hiring, evaluation, promotion, and even detect the need for training or support for workers. Thus, with such automation, the trade-off remains favorable to workers who can now concentrate on other tasks, thereby increasing their productivity. Yet the physical and mental health of workers, due to 14-17 hour working days, has negative implications for their health and future.
Take, for example, platforms such as Uber Eats and Deliveroo. These apps, catering solely to consumers, strategically leverage workers’ data to calculate remuneration and assess their performance. The lack of understanding by the algorithm raises apprehensions about the ’logical’ and ’unbiased’ mechanisms related to these apps. Usually on bicycles or scooters, workers try to deliver goods to consumers in record-breaking time, completely disregarding road signs, riding at high speeds, and ignoring risks associated with their deliveries. The app does not take variables into consideration such as in the case of an accident which would delay or stop delivery. As described by a worker in Mumbai, the algorithm would note that the goods that were supposed to be delivered were not, resulting in the order amount being deducted from the workers’ payout.
In Italy, for example, the Courts of Palermo and Bologna have agreed that the work on these platforms is highly managed by algorithms. The deliveries are assigned based on criteria that are not related to the preferences of workers or their general interests. As such, these principles violate Italian law prohibiting discrimination against employees or self-employed individuals. Unlike in the European context – where significant steps are being taken to ensure fairness, transparency, and accountability in regulating algorithmic management in traditional employment – India has not been able to take measures to protect and regulate the interests of platform or gig workers.
The European Commission’s proposal comes with a core promise to platform workers: to acknowledge the influence of algorithmic management within their working environment and conditions. The Directive aims to enhance and clarify the data rights of all workers, irrespective of their employment classification. So far, the debate has centered around the ways in which the privacy and data of an individual worker could be best protected. However, the Platform Work Directive goes beyond protecting platform workers. It seeks to strengthen regulation of technologies in workplaces that are not solely reliant on platforms.