In 2021 governments and courts across the globe set their sights on the gig economy. Gig platforms engage millions of workers worldwide as independent contractors; however, concerns around worker misclassification have increased focus on how they employ workers.
We have put together a summary of the cases and decisions from the USA and Europe that will shape the future of the platform economy for years to come.
Prop 22 was passed in November 2020 with 59% of the vote in California. According to Bloomberg, Prop 22 “deemed app-based transportation and delivery drivers contractors while providing a limited set of alternative benefits, such as minimum pay for their time on trips but not for their time waiting in between.”
Prop 22 was seen as a big blow to those fighting for increased worker rights for platform workers in California. However, in February 2021, a group of Uber and Lyft drivers filed a petition for writ of mandate, asking a California court to rule that Prop 22 violates the State’s Constitution. Judge Frank Roesch ruled that Prop 22 is unconstitutional and unenforceable. The case is likely to be brought to the U.S. Supreme Court to decide on the constitutionality of Prop 22.
Lime, a transportation company that runs electric bikes, scooters and mopeds across more than 120 cities, faced a misclassification case in San Francisco. The case regarded the misclassification of ‘Juicers’, people who charge the electric scooters and bikes, as independent contractors. The case was settled for $8.5 million.
Holland Acquisition Inc Misclassification
In October of 2021, it was announced that Holland Acquisition will pay $42.3 million in back wages and liquidated damages to 700 workers after misclassifying them as independent contractors.
DoorDash, a food delivery app, is paying $100 million to settle several class-action lawsuits for misclassifying delivery drivers as independent contractors.
In May 2021, the Spanish government ruled that workers for food delivery platforms and other companies should be classed as employees. The new law came into force on August 12th. Read more from SIA here.
In April, The U.K. Court of Appeal ruled that Addison Lee will not be able to fight the decision by the Employment Tribunal that drivers for the taxi and courier firm are entitled to workers’ rights.
The U.K. Supreme court also dealt Uber a blow when 5 Uber workers won the right to be treated as workers instead of self-employed. It is widely thought that this decision is likely to set a precedent for future misclassification cases.
In October 2021, Portuguese lawmakers moved forward with rules that would require ride-hailing and food delivery firms like Uber and Glovo to grant employment rights to some of their drivers and courier. The rules will also require the companies providing these services to share information with authorities around how their algorithms manage workers and jobs.
In April 2021, Italian gig economy workers scored a big victory when a Milan court fined food delivery platforms €733m for violating employment safety laws and said riders should be hired on a quasi-employee basis. The ruling came less than a year after the Milan court launched an investigation into Uber Eats’ recruitment practices and placed the company’s Italian subsidiary into external administration.
In what is the biggest news for the gig economy in 2021, the European Commission released a directive that aims to improve workers’ rights and working conditions in the platform economy. The proposed directive, released on December 9th 2021, seeks to ensure that all workers working via digital labour platforms can enjoy the labour rights and social benefits they are legally entitled to. These new rules will establish a common set of E.U. rules that will provide “increased legal certainty, therefore enabling digital labour platforms to benefit fully from the economic potential of the Single Market and a level playing field.”
Read our full response to this directive here.
2021 has set a precedent in the U.S. and Europe for the classification of workers that are currently engaged as independent contractors through gig platforms. We will continue to update you on legal cases and decisions in the gig economy in 2022 and beyond.
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