The European Commission (EC) has published a study on working conditions of platform workers.1 Platform work is understood as all labor provided through, on, or mediated by online platforms in a wide range of sectors. The report identifies key challenges related to platform work, such as employment status, autonomy, and information available to the workers about their working conditions, non-discrimination and dispute resolution.
The study details the variety of policy responses in the Member States and delineates certain policy options for ensuring a higher degree of protection of platform workers.
The present position paper argues that the said challenges are primarily caused by overly-rigid labor market regulations and therefore should be addressed not by introducing new legislation, but by allowing voluntary agreements between parties involved.
This approach would be in line with the characteristics of the sharing economy, which relies heavily on interpersonal trust, connections, feedback, and market mechanisms. Intervention on the part of the EU or Member States may have negative effects and is not advisable.
The breakthrough of the gig economy was preconditioned by the absence of regulation, i.e. more freedom to create and act. Attempts to introduce centralized rigid regulations would be a step backwards and would deny the very essence of working through online platforms. Applying employment standards to platform workers may be detrimental on a larger scale since this particular market segment has developed in essence to avoid rigid labor regulations.
More importantly, the interaction between the platform worker and the operator is based on provision of services as the former purchases services of the platform operator, therefore social protection is out of scope of such a relationship.
In recent years, there has been a significant growth and interest in the gig economy built upon the premise of online platforms that connect customers with service suppliers. New business models characterized by on-demand labor have disrupted existing industries and created new ways to fulfill shortages for companies and individuals.
It may be expected that the COVID-19-induced lock-down will only advance the spread of such online platforms. They bring more opportunities to traditional businesses by closely connecting suppliers and customers and reducing transaction frictions.
1 European Commission. New study looks at the challenges faced by platform workers. Available online: <https://ec.europa.eu/social/main.jsp?catId=89&furtherNews=yes&langId=en&newsId=9582>.