Could the Portuguese Parliament Strengthen Labor Protection In the Gig Economy?

The government is working on the proposed 'lei Uber' aimed at giving more protection to gig economy workers. How tech firms react is yet to be seen: will they follow in line or fight the legislation as they did in California?

The Portuguese Parliament is drafting a law as part of their legislative plan to further regulate the gig economy — specifically, with an aim to bolster the rights of workers on online platforms such as Uber and Glovo.  

Illustration by Bogdan Kamuta

Expresso reports that the proposed law, being proposed as part of the Orçamento do Estado 2021, aims to grant drivers, couriers, and other independent contractors employee status; ensure them a minimum wage; and guarantee them economic and social protection. This initiative was confirmed to Expresso by the Secretary of Labor, Miguel Cabrita, last week.

In the same article, Expresso makes reference to a government document used to guide the discussion for the OE-2021 where it is clearly written, “there are steps to be taken to reinforce the rights of professionals who work through digital platforms in Portugal.”

Portugal is falling in line with EU legislation that was drafted in 2019 to protect gig economy workers. Members of the European Parliament stipulated measures to promote more transparent and predictable working conditions, free mandatory training and limits to probationary periods and working hours.  

App-based companies such as Uber have not always taken kindly to added regulation. A clear manifestation of this is currently underway and actively being voted on in California. 

In Sept of 2019, governor Gavin Newsom signed into law a bill that created the criteria to establish a worker’s status as an independent contractor or employee. The law referred to as AB 5 makes it virtually impossible for major platforms to continue to classify their drivers as independent contractors and will force them to classify them as employees.

This law proved a big blow to Uber and Lyft, for it regulated what constituted a contracted employee and forced these multi-billion dollar companies to guarantee their drivers employee benefits, such as workers compensation, health care, sick leave, unemployment insurance, and to comply with local minimum wage laws. 

The law went into effect in January 2020, and was followed by a series of legal battles between Uber and Lyft and the State of California. Uber began taking some steps to address the main concerns their drivers had voiced, but did not do much to comply with the new law, and Lyft continued their operation as usual. 

In August a judge ordered the two companies to reclassify their drivers as employees. Both companies responded by threatening they would have to temporarily shut down their operations in the state to restructure their companies to be in compliance with the law. 

The companies have also raised the argument that complying with California’s new law would hurt drivers and customers because the firms would only be able to afford to hire a fraction of their existing driving force as employees, and as a result service would be greatly reduced. And they escalated the threat to warn that they may have to leave the state completely.

Uber and Lyft were able to appeal the ruling but were struck with a denial to their appeal the last week of October.  

All the while, Uber, Lyft, DoorDash, Postmates, and Instacart prepared a ballot initiative to introduce Proposition 22 onto the ballot. They have spent over $200 million on this proposition thus far. 

Prop 22 would exempt app-based drivers from complying with AB 5 and creates its own criteria, devised by the platforms, for what constitutes an app-based driver. The proposition does encompass certain labor regulations such as work hour limits, requiring companies to offer health care subsidies and occupation accident insurance — but nothing like what state law ensures employees. 

Californian voters will determine the fate of app-based drivers on Nov. 3, and it is set to be a tight race: a recent poll shows 46% of voters in favor of Prop 22 and 42% opposed.

Now, while the Portuguese equivalent of imposing labor regulation on these platforms is yet to be written, one cannot help but see the similarities in the goals they aim to achieve with those of the state of California. Portugal is a completely different context on a social and legal level, but it is still worth noting just how far companies like Uber are willing to go to fight state regulation.

The Instituto da Mobilidade e dos Transportes reported that as of July, 2020, there were 26,179 certified drivers in Portugal that operated as TVDE (the Portuguese licensing platform for contract drivers). Uber did not disclose how many drivers they have in Portugal in an interview with Público this July, but it did gloat that Uber is now present in 100% of the national territory.

Atlas contacted Uber about this proposed future legislation but they did not provide comment by publication deadline.

We also reached out to the Secretary of Labor, Miguel Cabrita, for added details of just what the proposed law would entail, however, his office did not respond in time for publication.

Further, Atlas got in touch with Sindicato Motoristas TVDE Portugal to get a sense of how drivers are responding to this news, but they did not get back to us before publication.

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