Shaping the Platform Economy — Better Data and Broader Research are Needed to Achieve a Desirable Future
By Dragos Adascalitei and Barbara Gerstenberger, Eurofound
Platform work is a continuously changing phenomenon both in its scale and scope. However, despite its increasing social and economic relevance, the size of the platform economy remains difficult to capture through reliable measurements. Existing approaches to measure the platform economy are generally based on one or a combination of different methods: surveys of different scale, big data, data made public by the platforms themselves or other secondary sources such as media reports. In the absence of administrative data, an important shortcoming of these methods is that there is little information about the extent to which they cover the target population. This generates difficulties in devising reliable estimates that could be generalised to the wider population while also limiting comparability of findings across different studies. Adding to issues linked to the scarcity of data is a lack of research in sociology or related fields that zooms in on specific sectors and types of platform work to analyse the consequences of this novel form of employment for working lives.
The most up to date evidence derived from European-wide surveys shows that around 11% of workers in the European Union have provided work through a platform with about 2.4% of them doing work on platforms as a primary source of income (Brancati et al. 2020). The scope of the platform economy is also constantly evolving. New business models that seek to capitalise on the flexibility afforded by platforms coupled with expansion into novel productive sectors means that platforms are consequential not only for their core business but also for the wider economy (Kenney et al. 2019).
Eurofound research acknowledges the heterogeneity of platform work, noting that there are at least 10 different types of platforms that currently can be differentiated based on the skill level required to perform the task, how the service is provided, the scale of the tasks, the selection process, and the form of matching adopted by the company (Eurofoud 2018). Types of platform work range from on-location platform-determined routine work (such the provision of taxi services through a platform) to online contestant specialist work (such as the provision of high-skilled services for various industries). The implications for working conditions of workers engaged in providing these various types of work is wide ranging: while workers performing on-location platform-determined routine work have little autonomy and control over task assignment combined with unpredictable earnings and algorithm-driven pace of work, workers who provide high-skilled services through platforms tend to have a higher degree of autonomy and control over how they perform their tasks.
In principle, the platform economy can provide workers with an opportunity for making a living, especially in slack labour markets where there are more workers available to work than available jobs. In these situations, working through platforms could provide access to income and could be seen as a route towards decent pay, especially for high-skilled workers who can use platforms to provide work across borders. In these situations, policy makers should create the framework that facilitates work through platforms while also tackling issues related to social security, taxation and undeclared work.
However, the diversity of platform types and the changing business models used by companies make platforms a moving target for regulators. Recent debates at the supranational and national levels have focused on issues of classification of on-location platform workers and the conditions that need to be fulfilled for a worker to be considered self-employed or an employee. Opinions on the issue of the employment status of on-location platform workers remain polarised. On the one hand, platform companies oppose regulations that would provide workers with employment status on grounds that this would stifle the further development of the platform economy and would reduce the flexibility afforded to workers by platforms. On the other hand, critics highlight the precarious working conditions that workers carrying out on-location platform work face, the lack of a minimum set of social rights and the inherent power imbalances between workers and platforms. They also note that an employment contract does not necessarily reduce the flexibility that platform workers enjoy but that flexibility can be retained within the boundaries of a traditional employment contract.
For example, a case study analysis of Deliveroo workers in Belgium demonstrates that the protections and income security provided by an arrangement akin to an employment contract were valued by workers (Drahokoupil and Piasna 2019). Moreover, debates focusing solely on the issue of flexibility tend to obscure what flexibility means in practice for workers who perform work on platforms, the trade-offs that it potentially entails and the heterogeneity of preferences of workers. For example, in the case of Deliveroo, worker’s expectations were shaped by previous labour market experience, whether they had an additional job or whether they had a student status. Workers also expressed a preference for greater flexibility ‘understood as the ability to control their own schedule’ (Drahokoupil and Piasna, 2019, p. 39). In this sense, flexibility was valued in as much as it provided workers with the autonomy and control over pay and working conditions.
Although in recent years policy activism around platform work and the conditions of work and employment associated with it has been on the rise, initiatives remain relatively scarce and predominantly located in Western Europe. Eurofound’s platform economy database provides an overview of the key initiatives currently in place in Member States. A quick look of the initiatives included in the database shows that these include both traditional regulatory instruments that seek to directly influence the working conditions of platform workers (such as the recently adopted Spanish Rider’s law) or initiatives that indirectly address the working conditions of platform workers through awareness raising and advice (such as the FairCrowdWork rating system jointly established by trade unions from Germany, Austria, and Sweden). Trade unions have also begun to reach platform workers. For example, in Croatia a trade union for platform workers has recently been established with the support of established trade unions. The new union aims to fight for dignified and better working conditions in a context in which platform work is not regulated in the labour code. Information captured in the database thus shows that both traditional instruments (legal initiatives, court rulings, trade unions, and collective bargaining agreements) and more innovative tools (shareholder-oriented business models, codes of conduct, establishment of an Ombuds office) are currently used to regulate platform work.
An initial assessment of a subset of the initiatives included in the platform economy database shows that while existent initiatives are a step forward in addressing some of the implications of platform work, they face challenges in terms of scope, coverage, generosity, and enforceability to various degrees. For example, while legal initiatives provide a good signal that legislation can be developed to address the working conditions and taxation issues of platform work, they tend to be narrow in scope, limited to specific types of platform work and face enforcement issues. Similarly, collective bargaining agreements that include platform workers provide a minimum level of protection but tend to be limited to platform workers with employee status. Other initiatives, such as cooperatives, do provide full access to labour and social rights but tend to be limited in scope due to existing market entry barriers and limited access to capital (Eurofound, forthcoming).
An important aspect worth noting is that the policy debate and the initiatives currently discussed in Member States, tend to focus predominantly on on-location platform workers while other sectors of the platform economy are largely absent from debate. One such example is the provision of care through platforms. Research on the Spanish long-term care sector shows that a more nuanced understanding of the platform economy and sector specific analyses are necessary to fully grasp how platforms are changing the world of work. In the care sector, the employer is the family who uses the services of a worker and trust plays a more central role in the delivery of services when compared to platforms that provide food delivery services. Furthermore, the gendered nature of work delivered through platforms in the care sector is obscured through a biased focus in both academic and policy debates on the male dominated transport sector (Digital Future Society, 2021).
Several regulatory blind spots are worth noting in relation to current initiatives around platform work. First, despite the well documented diversity of types of platform work, initiatives tend to focus on regulating on-location platform work. As of September 2021, there are no initiatives that seek to regulate online platform work. Importantly, online platform work also remains a great unknown in terms of scale, pay rates and working conditions. Second, definitions of platforms, platform workers and platform work are scarce, unclear, and differ across jurisdictions. This contributes to the emergence of regulatory grey areas that decrease the effectiveness of enforcement efforts. Third, discussions around regulation of the platform economy tend to focus on on-location platform work while paying less attention to other types. Extant evidence suggests that a more inclusive debate that draws upon evidence from different sectors can contribute to better regulation.
- Eurofound (2018), Employment and working conditions of selected types of platform work, Publications Office of the European Union, Luxembourg. Publications Office of the European Union, Luxembourg.
- Eurofound (forthcoming), First initiatives to improve the employment and working conditions of platform workers: What works?
- Digital Future Society (2021), Home care and digital platforms in Spain.
- Dahokoupil, J. and Piasna, A. (2019), Work in the platform economy: Deliveroo riders in Belgium and the SMart arrangement, ETUI Working Paper 2019.01.
- Urzi Brancati, M.C., Pesole, A. and Fernandez Macias, E., (2020) New evidence on platform workers in Europe, EUR 29958 EN, Publications Office of the European Union, Luxembourg, 2020.
- Kenney, M., Bearson D. and Zysman, J., (2019) The Platform Economy Matures: Pervasive Power, Private Regulation, and Dependent Entrepreneurs, BRIE Working Paper 2019–11.
The opinions and views expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of Reshaping Work.