BERLIN — Wojtek Świeca was startled when he received an email from Deliveroo on Monday notifying him, like the rest of the company’s roughly 1,100 other riders across Germany, that it would pull out of the German market as of Friday.
“It definitely came as a shock. I would never have thought that any company, in any field, would just disappear from the market within four days’ notice,” said the trained jazz guitarist, who spent the last three years working for Deliveroo in Berlin.
Deliveroo’s sudden departure has brought renewed focus on the circumstances of the workers it hires, most of whom qualify as self-employed and not full-time employees. They argue they get few of the protections afforded other segments of the economy, like health insurance and severance pay.
“[Deliveroo’s] employment model — we call it ‘bogus self-employment,’ they call it ‘freelancers’ — only has disadvantages for workers,” said Christoph Schink from Germany’s Food, Beverages and Catering Union NGG. “And the much-invoked liberty of only having to work whenever you want to work, with your own bike, your own cell phone, your own data [is of little help] now that the company is withdrawing.”
It’s an issue that’s cropping up across Europe, and has the nominee for Commission President Ursula von der Leyen vowing to push workers rights high up the agenda of the incoming Commission.
Deliveroo’s decision was a result of cut-throat competition from Dutch rival Takeaway.com, which recently acquired Just Eat, another food delivery platform, for about £5 billion. That makes it the largest food delivery platform outside of China — and after Deliveroo’s exit, the only major one in Germany.
As digital platforms enlarge their share of Europe’s economy, workers and policymakers have both expressed increasing concern about labor rights in the so-called gig economy. According to a 2016 McKinsey report, about 160 million in the U.S. and Europe engage in some form of independent work.
In December 2018, Uber said it had around 3.9 million drivers worldwide but employed only 22,000 people. In Germany Deliveroo says it had just under 100 employees and 1,100 riders.
Flexibility vs security
Germany isn’t the only place where Deliveroo has run into trouble. Its French workers protested earlier this month over the company’s new pay rules that no longer guaranteed a minimum €4.70 per delivery. Instead, Deliveroo cut pay for shorter trips and increased it for longer ones. Belgian riders in Gent protested in June for a guaranteed salary and against a cut in pay.
“I consider what Deliveroo did — telling riders that they’re all self-employed — completely intolerable,” Schink said in an interview. “If I get €5.50 per delivery — and if I am truly fast and ignore every red light, and manage three deliveries per hour — then I end up with an hourly income of €16.50. Out of that, I have to pay all my insurances, my pension scheme, my taxes, which is something a lot of people don’t see, and then I still need to pay myself a salary. At the same time, I ride around only for one employer, wearing their clothes so that I also make advertisement for them. That’s no ‘self-employment,’ is it?”
National governments and the European Commission have made promises to ensure social protections for workers. In her July manifesto, von der Leyen said: “I will look at ways of improving the labour conditions of platform workers, notably by focusing on skills and education.”
But Schink said he does not believe new regulation is the answer. Rather, it’s about making sure existing rules apply to the gig economy.
“Those rules have been obtained through hard fights,” he said. “I don’t care if work is being organized on a platform, or happens in an industrial plant, or at a restaurant. It’s labor — the exchange of time for money — and there are a couple of rules to make sure that not the entire entrepreneurial risk is shouldered by workers only.”
The EU passed a law in April that guarantees minimum rights for workers in “casual or short-term” employment, specifically mentioning platforms like Uber and Deliveroo.
But platforms are increasing their influence too. The French lower house in June passed a law that does not classify workers for digital platforms as employees, allowing the platforms not to offer benefits like sick leave and paid holiday. In Spain, the courts ruled the other way, classifying Deliveroo’s workers as employees.
“At the moment there is a trade-off between flexibility and security in employment law, where employees have little flexibility but more protection, and the self-employed can work flexibly but with less protection,” Deliveroo had said in a statement.
That’s a tradeoff that worked for Świeca — before Deliveroo pulled out.
“This flexibility also comes at a cost,” he acknowledged, describing the situation of gig economy workers like himself and his former colleagues at Deliveroo as “precarious.”