Uber warns of layoffs, price hikes ahead of EU Platform Work Directive

Ride-hailing platform Uber has warned that it will increase consumer prices and remove its service from “hundreds” of European cities in response to upcoming EU legislation that gives gig workers full employee rights.

The Platform Work Directive would see freelance drivers and couriers, known as gig workers or platform workers, reclassified to de facto full-time employees to curb exploitative practices by the online ride-hailing and food delivery platforms that employ them.

In response to the upcoming legislation, which the European Council took a common stance on last June, Uber Head of Mobility in Europe Anabel Díaz said the company would have to stop operating in “hundreds” of the cities it serves and increase prices by “as much as 40% for consumers.”

In the Financial Times report, Díaz assured investors Uber would keep turning a profit, with consumer and worker layoffs and price hikes evidently making up for any losses. Last year, Uber made $8.6 billion in worldwide revenue.

Díaz claimed that introducing national legislation with similar aims in Geneva, Germany, and Spain led to “devastating” job losses. In Germany, Uber contracts middleman companies which employ drivers to serve the app’s customers. The model is similar to temping agencies in Malta, which companies contract to supply human resources.

Uber was rolled out in Malta in June 2022 in partnership with Alf Mizzi and Sons and is led by the former CEO of Bolt, Sebastian Ripard. It faces competition from similar ride-hailing services such as Bolt, eCabs and several smaller operators.

While last year, virtually every press outlet in Malta hailed the arrival of the ride-sharing app, replicating the company’s statement without question, The Shift reported the real story, showing the company’s track record on labour rights issues.

The gig work industry in Malta remains largely unregulated, except for rules obliging vehicles used as taxis to be registered with ‘Y’ licence plates, requiring overnight garaging and driver ID tags.

Last June, the European Council adopted a common position ahead of negotiations with the European Parliament for the Platform Work Directive, claiming it will help “millions of gig workers gain access to employment rights.”

The directive proposal calls for the introduction of criteria to determine the “correct employment status” of workers. The Council claimed the EU had 28 million platform workers “including taxi drivers, domestic workers and food delivery drivers.”

Among other criteria, platform workers with limitations on how much revenue they can generate and restrictions on whether they can turn down work and workplace dress codes would be legally considered an employee of the platform.

The proposal also seeks to introduce more transparency into the algorithms used by employment platforms like Uber, ensuring “workers are informed about the use of automated monitoring and decision-making systems.”