Gig Economy Project – Spain’s Riders Law comes into force: Here’s what you need to know

The Riders Law comes into force in Spain today [12 August], with a great deal of confusion about the exact situation for app-based food delivery workers now, as digital platforms refuse to hire all riders directly despite the Law. The Gig Economy Project talks you through what you need to know.

The Gig Economy Project, led by Ben Wray, was initiated by BRAVE NEW EUROPE enabling us to provide analysis, updates, ideas, and reports from all across Europe on the Gig Economy.

This series of articles concerning the Gig Economy in the EU is made possible thanks to the generous support of the Andrew Wainwright Reform Trust

Photo by Mario A.P.

What is the Riders Law?

The Riders Law, official name the ‘Stop Fake Autonomous Act’, introduces a “presumption of employment” for “any consumer product or merchandise” which is delivered “through a digital platform” in Spain. The Law was passed in May but platforms were given three months to prepare for its formal enforcement. Those three months are up as of today [12 August].

Had Spanish courts not already decided riders were fake self-employed?

Yes, 49,755 workers have been identified as false-self employed by the Spanish Government’s Labour Inspectorate since 2018. That is based on 48 court judgements in favour of employment status for riders, including at the Supreme Court last September.

However, digital platforms had basically been ignoring these legal judgements and continuing on regardless, arguing that they related to isolated cases. The hope is that the Riders Law, as government legislation, will make it absolutely clear to digital platforms that the state upholds the court judgements as a general principle, and will legally enforce it, if necessary through criminal prosecution.

Hope”? So it’s not clear that riders in Spain will all be employed now?

No. Indeed, the digital platform delivery company in Spain with the largest market share, Glovo, still plans to hire 80% of its riders through a freelance model. Just 2,000 of Glovo’s riders will be directly employed, out of a workforce of about 12,000.

The justification Glovo are giving for this is that the Riders Law only establishes a “presumption of employment”, and that they can prove that these workers are in fact self-employed, because they are making four changes to their algorithm.

First, there will be no time slots for deliveries (like Uber Eats already does). Second, they will allow riders to adjust the price of a delivery up or down slightly, so that they may be outbidded by another rider if they seek a slightly higher price. Third, they can refuse orders and, fourth, they can subcontract other workers in their place.

The company believe these four changes to the algorithm is sufficient to skirt around the Riders Law, even though riders’ work is still directed by the algorithm like before.

Will Glovo get away with this?

It seems unlikely. As Adrián Todolí, PhD in Labour Law from the University of Valencia, explains: “The delivery drivers can make small or large variations in their day-to-day work, but the system remains subordinate to Glovo. The Supreme Court makes it very clear that it is not relevant whether the worker can choose their schedule or refuse orders. What is relevant is who owns the digital tool”.

This seems to be the general consensus among experts and unions, but Glovo has an army of lawyers behind them to defend their position. The union CCOO has already lodged a complaint to the Labour Inspectorate of illegal employment practices at Glovo, so this is likely to end up back in the courts.

How have other delivery platforms responded to the Riders Law?

Deliveroo, the British-based platform, is deserting Spain, a move which is partly driven by the Riders Law and partly driven by their low-market share in the country. The company announced two weeks ago that it will end operations, but to do so legally it must first hire all its riders before issuing a collective dismissal. Over 3,000 riders will lose their jobs.

Uber Eats has told its riders that they can no longer use the app on a self-employed basis, and have to be hired by one of the distribution companies which Uber Eats subcontracts work from.

Stuart Delivery, a smaller platform in Spain, says it is “making every effort so that most of its fleet is hired directly”.

Just Eat had already ended its use of false self-employed riders before the Riders Law, albeit the vast majority through sub-contracting. It says it is planning to hire some riders directly, but will not put a figure on how many.

The shift to sub-contracting has been criticised by RidersXDerechos, a network of riders which campaigns for riders rights, who say it is an illegal transfer of workers.

Fernando Roan from the Unified Association of Riders (AUR) has said of Uber Eats specifically: “We are leaving a lot of delivery people on the street. They are sending us to subcontractors who offer conditions of absolute precariousness and do not take into account our seniority. There are people who have been distributing with Uber Eats for years. The compensation they give for gasoline does not cover the activity, it is a pittance.”

Is this sub-contracting legal within the Riders Law?

That’s complicated. The digital platforms at the last minute successfully negotiated into the Riders Law that sub-contracting was possible, but that does not necessarily mean that all forms of sub-contracting are applicable with the Law and the court judgements. If the umbrella company between the worker and the platform is not acting as a proper employer, and work continues to be directed by the platform, then workers have a legal case to say that they have been illegally transferred to another employer.

Ignasi Beltran, professor of labour law at the University Oberta of Catalunya, has said: “If [the contract] does not contribute anything because the delivery drivers are organised with the platform’s application and only provide the labour, it would be an illegal assignment”.

AUR is planning on suing Uber Eats for dismissal and illegal transfer. So sub-contracting is also set to end up in a court battle.

This is messy. Could the Riders Law not have been clearer that digital platforms have to hire all riders directly?

Yes, but the Riders Law was the outcome of a six month negotiation through ‘the social roundtable’, where the Minister of Labour, Yolanda Díaz, tried to find a consensus between the Spanish employers’ association, CEOE, and the two big Spanish unions, UGT and CCOO.

The initial law was set to include all workers on digital platforms, including for example those in the home care sector, but – under pressure, including from her coalition government partners – Díaz narrowed the law to just app-based delivery workers. The CEOE and digital delivery platforms also chipped away in the negotiations, and the law was weakened. RidersXDerechos, which was involved in discussions with Díaz in the early stages of the Law, would not even offer its support for the final version.

Having said that, the delivery digital platforms were furious about the final result, with Glovo even leaving the CEOE for agreeing to it.

Did the trade unions win anything important in the negotiations?

Yes. The other thing that the Riders Law does is provide union representatives with some access to the algorithms of the delivery digital platforms. According to the Spanish Government’s Ministry of Labour: “Workers’ legal representation will have to be informed of the rules that algorithms and artificial intelligence systems may have an impact on the working conditions governing the platforms, including access to and maintenance of employment and profiling.”

That is unprecedented, because digital platform algorithms have been a black box for workers everywhere, who do not know how their pay is set, what information is kept on them, and thousands of other important bits of data which their work has produced but has been denied to them.

Just Eat is negotiating a collective bargaining agreement with UGT and CCOO at the moment, a first in Spain, and those unions should be able to use their access to the algorithm to inform those collective bargaining negotiations.

So what happens now?

Many riders across Spain who should have had a clear understanding of what their work situation would be as of 12 August months ago, but they have been left totally in the dark, and now many have been left confused by the various ways digital platforms have responded to the legislation.

CGT riders have tweeted that they’ve organised meetings of riders today and found that: “The situation is critical: Uber Eats mass dismissals, Glovo with a new self-employed system that makes the situation even more precarious, Deliveroo that does not intend to pay the redundancies.”

So far from providing clarity, it’s very much to be determined whether the Riders Law will provide improved rights, pay and conditions of work for riders. The legal cases will surely be important, as will the Labour Inspectorate enforcing the Law systematically (RidersXDerechos have called for greater resources for this body), but so will the organisation of riders themselves to challenge the digital platforms directly and defend their rights. The struggle goes on.

CGT riders add: “We have agreed to defend our working conditions. In both the autonomous and subcontracted models. Until their exploitative systems fall. Creating collective consciousness among comrades and actions in the streets. Mutual support and workers solidarity.”

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