Uber Warns of Potential Shutdown and Price Hikes if Gig Worker Regulations Pass in the EU


Uber, the global ride-hailing and food delivery giant, has issued a stark warning about the potential consequences of proposed European Union regulations that could classify gig workers as de facto employees. Anabel Díaz, the head of Uber’s mobility division in Europe, cautioned that if the EU’s Platform Work Directive is enacted in its current form, Uber might have to shut down its services in hundreds of cities across the bloc. She also suggested that consumer prices could rise by up to 40 percent.

The EU’s Platform Work Directive aims to improve the labor conditions of gig workers in the European Union. If passed, it would give gig workers, including ride-hailing drivers and food delivery couriers, the same rights as full-time employees by default.

Díaz argued that these proposed changes could lead to a significant reduction in work opportunities, estimating that there might be a 50-70 percent decrease in job opportunities for drivers and couriers if the directive becomes law. This, she claimed, would force Uber to cease operations in many of the 3,000 cities it currently serves across the EU.

Additionally, Díaz suggested that Uber would be compelled to increase consumer prices. According to her, prices could surge by as much as 40 percent in major cities, leading to longer wait times for riders due to fewer available drivers.

Díaz stressed that Uber is committed to the European social model but cautioned against adopting regulations that have previously resulted in job losses. She pointed to instances in Spain and Geneva where similar rulings led to what she described as “devastating” job cuts.

She explained that if Uber had to comply with these regulations, it would need to consolidate work hours among fewer workers. Drivers and couriers would be required to apply for specific shifts at set times and locations, accept all trip requests, and agree not to work on other competing apps.

However, Díaz denied that these regulatory changes would significantly impact Uber’s profitability in Europe. She stated, “This isn’t about Uber’s profits,” highlighting the company’s ability to adapt to local regulations, such as its use of third-party employment models in Germany.

In Germany, for example, Uber contracts with fleet management companies, which then employ drivers, allowing the company to operate within local rules. While this approach has resulted in higher prices, it enables Uber to offer its services in major cities with a consistent demand.

In the UK, following a legal ruling in 2021, Uber classifies its drivers as “workers,” granting them certain benefits like holiday pay and sick leave, although they don’t have full employee status.

Despite Uber’s warnings and similar concerns raised by industry rivals like Bolt, some EU officials have pushed back against what they view as lobbying tactics by the tech sector. Nicolas Schmit, the EU commissioner for jobs and social rights, emphasized the importance of establishing clear criteria and factual assessments in determining worker classifications.

“This is about establishing clear criteria and looking at the facts. If the platform is, in fact, an employer, then the people working for it are entitled to the same rights and protection as workers in the ‘offline’ world,” Schmit said during the launch of the EU’s proposal.

Meituan Plans Share Buyback Valued at Up to $1.0 Billion Author: Borys Gitelman
Deliveroo Sees Expansion Into Non-Food Driving Growth Author: Borys Gitelman
Meituan’s Profit Tripled on Rising Chinese Consumption Author: Borys Gitelman
Instacart Adds Peacock As First-Ever Streaming Partner Author: Borys Gitelman
Delivery Hero-owned Baemin to exit Vietnam in December Author: Borys Gitelman
Uber Shuts Down Instant Delivery In NYC Author: Borys Gitelman
Swiggy gears up for $1 billion IPO, SoftBank may sell stake Author: Borys Gitelman
The EU Wants to Fix Gig Work, but Uber Has Its Own Ideas Author: Borys Gitelman
Just Eat Growth Momentum Stalls In Ireland Author: Borys Gitelman
Amazon to sell Hyundai vehicles online starting in 2024 Author: Borys Gitelman
Britain’s Ocado secures first deal beyond grocery retail Author: Borys Gitelman