Europe could be seeing the decline of its concert economy

In its stock market debut, the British food delivery company Deliveroo saw the share price fall by around 30% while questions about the rights of its riders ’workers materialized.

In the days leading up to the listing, the company revised the share price as some investors chose to avoid going public due to these concerns.

Deliveroo is just one example of a broader “concert economy” that is being subjected to increasing control. In recent weeks, the industry has been shaken by a series of court rulings and regulatory measures across Europe that could ultimately alter the business model.

Uber’s loss to the UK Supreme Court last month forced the company to reclassify 70,000 of its British drivers as workers, which gave them a minimum wage, paid holiday time and pension plans.

In Spain, legislators have introduced a series of measures that would recategorize concert workers as employees with formal contracts and benefits.

Meanwhile, the European Commission, the executive arm of the EU, is scrapping plans for some sort of regional reform on workers in the concerted economy, their status and their rights.

James Farrar of the App Drivers and Couriers Union, who took on the case against Uber in the UK, said there had been an “early triumphalism”, but that this is just the beginning of a wave in the rights of workers of the concerted economy.

“We’re still getting to the bottom step here and we’re not there yet,” he told CNBC.

“I think what was really significant in the Supreme Court ruling is that it opened up space for other claims from the whole concert economy to be successful.”

Other companies are preparing for change in some way, whether instigated by regulation or of their own free will.

Just Eat Takeaway, Europe’s largest online food delivery company, is moving its Just Eat delivery providers to employment contracts. Prior to the merger of the companies, the pilots of the original firm called Takeaway.com contracted these contracts.

“As part of this model, messengers are entitled to an hourly wage, they are paid above the minimum wage, with employment and social security insurance, in accordance with local law,” said one spokesman, who added that messengers have equipment such as bicycles.

In the case of Spain, market operators like Glovo are waiting to see exactly how the legislation will be implemented and how to respond.

Co-founder Sacha Michaud is not a fan of the path taken by Spanish lawmakers.

“It’s a pretty strict regulation, probably the strictest (in Europe), so it’s a pretty radical position in the sense that it allows for very little flexibility, which is one of the things we obviously follow, and the pilots they ask as well, ”Michaud told CNBC.

Michaud said Glovo will “obviously adapt to the regulation” when it is in place, but said the company is more in favor of a midpoint between employee flexibility and benefit and safety provision, while avoiding labeling. of employment.

He added that surveys conducted on Glovo pilots showed that most prefer a flexible model rather than a stricter one. He said this helps many pilots who may be working on concert platforms between their studios or other jobs.

“They should be social rights, yes, and see how we can maintain flexible working conditions in that regard. It doesn’t necessarily have to be white or black.”

This intermediate route approaches Prop 22 in California, approved last November and backed by Uber and Lyft.

It’s an approach that Uber would like to see replicated in Europe. In February, Chief Executive Dara Khosrowshahi released a document calling on the European Commission to follow the mixed model, such as that of California.

Changes in the regulatory status of workers will introduce a number of new costs. This will also be important for smaller businesses in the space.

John Ryan, of the new UK-based company Gigable, which connects restaurants and other businesses with freelancers, said consumers could end up feeling the weight with price increases.

“But I think people are comfortable enough with the price increase if they know they’re going to the drivers or if there’s public support for the move, but that has to be seen,” Ryan said.

He added that the flexible model may work for some workers and others will prefer traditional employment.

“We’ll see how difficult it is for people to commit to obligations.”

According to Farrar of the ADCU, contracts and worker status are just a front in this battle.

His organization also pursues initiatives around drivers ’access to data that companies have and what he calls“ algorithmic control ”.

“We are seeing an arms race in the surveillance of workers in the concert economy and this is causing problems,” he said.

The ADCU supports two London pilots in a case they are bringing to the Netherlands against Indian company Ola. Drivers are seeking access to the data the company possesses, according to the general rules of the EU GDPR, which they say have been denied.

Farrar said technology like AI to monitor driver performance and determine how much work they get is a red flag. The group also calls on Uber to stop using facial recognition to verify drivers.

Farrar said the debate over regulations, including those at EU level, focuses mainly on the employment situation, but that the debate will need to further refine the algorithms.

“I think it’s being overlooked everywhere so far, but we’ll raise the issue with certainty,” he said.

“Regulators and policymakers tend to catch up on this instead of doing it.”