More Platform Services Needed in the EU, not a Platform Work Directive

10/13/2023 Remigijus Simasius.

CPI senior adviser Dr. Remigijus Simasius argues that more platform services are needed in the EU, not a Platform Work Directive. The Directive as we see it is an attack on innovation, digitalisation, the sharing economy, and flexibility – all those important things that EU politicians like to name as their “strategic targets”.

The real roots of the New directive is the resistance against inovation. The photo is from 2019 strike of taxi drivers in Madrid. ©picture Euronews.

When a bank drags you into bureaucracy and demands some additional data from you, it is clearly the bank that you perceive as the bureaucrat. Even if that bank is required by law to demand that data.

Well, on the same principle:

• When ride-hailing and food delivery services become more expensive;

• When getting even a high-priced service is sometimes as impossible as getting a taxi in Rome during peak or "abnormal" hours;

• When service providers no longer provide the opportunity for students to work when they have the time and the inclination to ride a bicycle with a backpack for money;

When all that happens it will probably be Wolt, Bolt, Uber, and others that are blamed. And not politicians.

Many politicians in every country, in turn, will blame the European Union (EU) for new regulations imposed on sovereign member states. Which is both ironic and hypocritical, because national politicians have so far been enthusiastically in favour of a regulation just like this – just read the draft of the Platform Services Directive. The Draft Directive is making progress. The European Commission (EC) and the European Council have already approved it. The European Parliament will consider it soon. And would you care to bet on how many members of that Parliament (MEPs) will oppose this draft? The smart money says: very, very few.

The EU presents the regulation as a tool for the protection of workers, and provides information in fine propagandist style – just the good news and no hint of negative aspects or controversies: (https://www.consiIium.europa.eu/en/policies/platform-work-eu/).

Let's look at the other side of the proposal – what it is, what consequences it will have, and what it tells us about the EU.

“Platform Services”, you understand, is a fancy way of referring to the “gig economy”. If you’re “working through a digital platform”, you're working in the gig economy. And, if you're ordering goods or services digitally via a platform, you’re doing what’s commonly known as “using an app”.

Now, the main thrust of this Draft Directive is to reclassify those performing “platform services” as working under labour contracts. This will “improve the working conditions and social rights” of gig economy workers. Which is all very nice – and politicians just love to say (and think) they are doing stuff like that. But unfortunately what it's really going to do is multiply costs, reduce flexibility, and restrict the gig economy's development. And its abilityto provide services people want and work people want to do.

And just take a look at the criteria the Eurocrats and lobbyists have come up with. The conditions, that is, under which it is considered that “labour relations” exist, and not “platform services”. According to the draft, this happens when a platform meets at least three – just three! – of the following seven criteria:

• It determines upper limits for the level of remuneration

• It requires the person to respect certain rules with regard to appearance, conduct towards the recipient of the service or performance of work

• It supervises the performance of work, including by electronic means

• It restricts the freedom to choose one's working hours or periods of absence

• It restricts the freedom to accept or to refuse tasks

• It restricts the freedom to use subcontractors or substitutes

• It restricts the possibility to build a client base or to perform work for any third party

  
  

Meaning that, if you need a one-time service – like a baby-sitter so you can go out for the evening once a month, or a magician for your child's birthday party – that would already count as “employment” according to these criteria! As long as it is ordered online through an app – a Digital Platform. It seems that there are magicians working at the EC and not just at kids' parties, since doing the very same thing remains a service if no digital platform is involved, but magically becomes a labour contract if a tech element is there. So is the initiative about protecting individual service providers (by forcing them into labour contracts), or is it about fighting tech and innovation?

Now, think who is going to be affected by this. Remember that it is extremely difficult for some people who are marginalised by society to find employment in a permanent workplace. Ex-convicts, for instance, or immigrants – and other socially vulnerable groups. Often it's only the flexible providers of the gig economy that will accept their services.

So imagine what will happen to the ability of such people to integrate after the government restricts the opportunities for them to provide their services via digital platforms!

The government, no doubt, will be Concerned for them. And this Concern will manifest itself in social benefits, social services, and integration programmes. But it won't be real integration. Rather it will be a mere parody of integration in comparison to the possibility of providing services in return for a monetary reward.

One last thing about what this Directive would actually bring. Have you ever heard EU officials enthusing about the “sharing economy”? They say, rightly, that the sharing economy is a beautiful thing – it creates opportunities, saves resources, reduces CO2 emissions. But it is more than obvious that the Directive would reduce the number of those “accidental” Uber, Bolt or other drivers with their own personal cars (the actual practitioners in the sharing economy).

Now, maybe this is just a detail, a drop in the ocean of European regulations. Unfortunately, this “detail” has an impact on people's destinies. Not just the destinies of (often vulnerable) individuals. But also the destiny of Europe itself.

For it is an attack on innovation, digitalisation, the sharing economy, and flexibility – all those important things that EU politicians like to name as their “strategic targets”. But they tend to forget that targets should be things you try to achieve. Not things that you take pot-shots at and try to kill. And this ocean of regulations is not an ocean at all, but a sea-sized river of new restrictions that are washing away Europe's competitiveness.