Meeting with Uber CEO Dara KHOSROWSHAHI
Ref. Ares(2021)7561885 - 07/12/2021
Ref. Ares(2022)1661590 - 07/03/2022
Virtual meeting, 23 November 2021, 16:30
CAB SCHMIT/969
Commissioner Schmit
Jobs and Social Rights
Meeting with Uber CEO Dara KHOSROWSHAHI
Bilateral discussion on the platform work initiative
Virtual meeting, 23 November 2021 – 16:30
CAB room VTC
Member of Cabinet in charge:
Main contributors:
Ana Carla PEREIRA
Briefing coordination:
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Meeting with Uber CEO Dara KHOSROWSHAHI
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Scene setter
You are meeting with Mr Dara KHOSROWSHAHI, CEO of Uber Technologies
Inc.
The discussion will revolve around the Commission’s forthcoming initiative on
platform work. This is an increasingly sensitive topic for
Uber, which in the last
twelve months has faced a series of high-profile judicial blows to its
business model of contracting self-employed drivers, in both the EU
(notably in France and the Netherlands) and the UK.
Mr KHOSROWSHAHI’s pivot will most probably build on Uber’s White Paper on
A Better Deal for European Platform Workers, published on 15 February 2021
(cfr. Background section for more details).
Mr KHOSROWSHAHI will make the case that people working through
platforms should remain self-employed, while being given more social rights
and better social protection.
Following the UK Supreme Court ruling, Uber drivers now fall under the third
category status of ‘worker’ (this is different from ‘employee’, which corresponds
to the concept of ‘worker’ in most EU countries). Uber has so far not advocated
for a UK-style third category status to be applied in the EU, but is starting to call
for ad hoc work arrangements combining autonomy and increased benefits.1
Table of Contents
Speaking points .................................................................................................... 3
Defensives............................................................................................................ 4
Background .......................................................................................................... 5
Annex ................................................................................................................. 10
1 For instance, in August 2021 it proposed an “industry-wide gig worker benefits model” in
Canada. Reuters article availabl
e online.
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Speaking points
[General remarks]
Uber is a very important player in Europe’s platform economy,
providing job opportunities to tens of thousands of people, as well as a
service that is appreciated by consumers.
The European Commission appreciates the benefits of the platform
economy and of platform companies such as Uber and wants to make
sure that these benefits are spread equally and accessed fairly.
Challenges remain, particularly as regards the correct classification of
the
employment status of many people working through platforms, as
well as the transparency and accountability of
algorithmic management
and surveillance.
The Commission is looking into these issues in the context of its
forthcoming initiative on platform work, while keeping an eye on the
development of courts’ relevant jurisprudence.
The Commission is of course
very keen to hear the views of platform
operators and of people working through them.
[On Uber’s White Paper]
Your White Paper on
A Better Deal for European Platform Workers is an
important step towards building
a sustainable business model for
platform work, balancing flexibility and decent working conditions.
I read the paper with great interest and appreciated the Five Pillars
around which your approach to “good platform work” will revolve:
Flexibility, Protection, Earnings, Growth and Voice are also
part of the
key dimensions of the European social model.
I also commend your engagement with several stakeholders, such as the
Open University, Axa and OpenClassrooms, to pursue better working
conditions and growth opportunities for people working through Uber.
[On the Commission’s initiative]
As you know, the Commission is looking into ways to improve the
working conditions in platform work and is planning to adopt a legislative
initiative on 8 December.
This initiative builds on extensive consultations of relevant stakeholders.
Between 24 February and 15 September, the Commission held a two-
stage consultation of European social partners, on the direction and
content of potential EU action.
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This came after several fact-finding workshops organised throughout
2020, which directly involved platforms, including Uber, and people
working through them.
In September 2021, we organised two additional exchanges with
platforms and representatives of people working through them. Uber was
again present and contributed to the debate.
Defensives
Uber is keen to provide more social protection and growth opportunities
such as insurance and re-skilling programmes to its drivers and riders.
However, we fear this may prompt their reclassification from self-
employed to workers.
The Commission welcomes Uber’s and any other company’s initiatives to
improve the working conditions of people on platforms.
The reclassification of people from self-employed to workers is an
empirical exercise, based on evidence and facts.
So far, the courts have not based their rulings on reclassification on the
provision of social protection or growth opportunities provided by
platforms, but rather on the finding that the people concerned were in a
position of subordination vis-à-vis the platform.
The key question is how much control a platform exerts over a person’s
provision of a service, be it directly or indirectly through the use of
algorithms.
Will the Commission’s initiative reclassify people on platforms from self-
employed to workers?
The employment status of people working through platforms is one of the
issues that the Commission is looking into in the context of its
forthcoming legislative initiative.
We are observing the courts’ growing jurisprudence on the matter, and
see that reclassifications take place when evidence points to a
misclassification as self-employed, despite a factual relationship of
subordination.
The Commission is aware that different platforms have different business
models. In our legislative initiative, we will aim to balance flexibility with
improved protection for people working through platforms.
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Will the Commission’s initiative introduce a European third category
status for people working through platforms?
The Commission is very aware of Member States’ different sensitivities
on social policy and does not intend to create a European definition of
what is and what is not a worker.
We want to ensure decent working conditions for people working through
platforms and legal certainty for platform companies to continue offering
their services.
In light of this, and based on the evidence gathered so far, a third
category status does not seem to be the best approach to regulate
platform work.
Background
[On the platform work initiative]
The Commission President’s Political Guidelines commit to look into ways to
improve the working conditions of people working through platforms.
The Commission Work Programme for 2021 includes a
legislative initiative
under Article 153 TFEU to improve the working conditions in platform work.
After extensive fact-finding, the Commission launched a two-stage social
partners’ consultation on the matter on 24 February.
The first stage, asking for views on the direction of a possible initiative, ended
on 7 April. It received
14 responses from officially recognised social
partners.
The second stage, which asked for
social partners’ views on the content of a
possible initiative, was launched on 15 June and ended on 15 September.
Social partners decided not to enter into negotiations, so the Commission
decided to present a legislative proposal on 8 December 2021.
We have already engaged in extensive exchanges with other stakeholders
at both political and technical level in the run up to the launch of the social
partners consultation.
Uber was represented in several of such discussions, both bilaterally and in
stakeholder fact-finding workshops organised by the Commission services,
including a recent exchange in September 2021 with representatives of
platforms
We also welcome stakeholders’ position papers and contributions such as
Uber’s White Paper.
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[On Uber Technologies Inc.]
Uber Technologies Inc. (also known as simply ‘Uber’) is an American company
founded in 2009 by Garrett Camp and Travis Kalanick.
Uber offers primarily ride-hailing and food-delivery services (“UberEats”), but is
also active in the package-delivery and freight transportation sectors in the US.
Uber operates in over 900 metropolitan areas worldwide, covering 69
countries, through 26,900 employees (2019 data) and has an estimated
revenue of $11.14 billion (2020 data).
In Europe, Uber is perhaps the main platform economy operator, being
active in 23 countries through more than 280,000 drivers and 370,000 riders
(Uber’s own data, 2020).
The Uber app was officially launched in 2011 in San Francisco. Initially, it only
allowed users to hire luxury black cars. It then launched the UberX (2012) and
UberPop (2014) services, the latter soon becoming the main source of
controversies surrounding the company.
UberPop allowed non-licensed people to offer rides to customers and was
heavily contested by taxi-drivers, especially in Europe. In 2017, a
CJEU ruling
on a Barcelona case ended UberPop service provision in the EU.
UberEats was launched in 2014 and is now one of the two main pillars of
the company’s business, the other being UberX.
Uber has been mired in corporate scandals, concerning i.a. its toxic work
environment and allegations of sexual harassment by female employees.
Uber’s former CEO Travis Kalanick resigned from the board of directors and
sold his shares as a result of the scandals.
Dara KHOSROWSHAHI has been the CEO of Uber since 2017. In 2019, he
oversaw the IPO of Uber.
Uber has been loss-making since its foundation. Observers claim its
business strategy is, alongside that of many similar ‘unicorns’, to grow fast and
aggressively by acquiring ever larger shares of the market and make profits in
the long-term through semi-monopolistic rent gains.
Uber has also been experimenting with self-driving vehicles through its Uber
Engineering department, building on the large pools of data it has access to
through its ride-hailing and food-delivery services.
The Commission has met with Uber representatives on at least 5
occasions since December 2019, at both Cabinet and services level
bilaterally and in stakeholder fact-finding workshops.
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[On Uber’s CEO, Mr Dara KHOSROWSHAHI]
Mr Dara KHOSROWSHAHI is an
Iranian-American businessman who has
been the CEO of Uber since 2019.
He holds a degree in Electronic
Engineering from Brown University. He
has worked in finance and business,
becoming the CEO of Expedia, a travel
arrangement company, in 2005.
He left Expedia in 2015 and in 2016
was listed as one of the United States’
highest paid CEOs.
In 2017, following the scandals within
Uber, he was hired with the specific
purpose of ‘cleaning up’ the company’s
public image in view of the 2019 IPO.
KHOSROWSHAHI has been outspokenly critic of Donald Trump’s presidency and
immigration policy in particular. He has donated to both the US Democratic and
Republican parties. He supported Hillary Clinton in the 2016 Presidential election.
In 2021, following the UK Supreme Court ruling on Uber drivers, he signed an
op-ed
presenting the changes made to the company’s business model to adapt to the
reclassification of drivers as ‘workers’ (in the UK, this means third category status).
[On Uber’s White Paper]
Uber’s White Paper recognises that the sustainability of the platform economy
depends on the fairness of platforms’ business models.
The paper explicitly refers to the European Pillar of Social Rights and describes
key actions put forward by Uber to pursue these principles, in partnership with
stakeholders like the OECD Forum and the Open University.
The five pillars for good platform work that Uber identified are
Flexibility,
Protection/Benefits, Earnings, Growth and Voice.
Uber is also introducing more transparency in some markets, by telling drivers
and couriers how distant and how much paid a ride will be before they accept it
(e.g.
the Earnings Estimator tool introduced in France).
In the White Paper,
Uber expresses the fear that courts may reclassify its
drivers and/or riders because of the provision of social benefits like the
industry-funded portable benefits described in the paper.
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Empirically, however, this does not seem to be a criterion that courts take into
account when ruling on the employment status of people working through
platforms. Rather, thus far they have looked at the degree of control exerted by
platform companies over the performance of tasks.
Across the EU and the UK, there have been approximately 25 court rulings on
cases involving Uber as a party in at least 4 Member States. These rulings
concern the employment status of drivers but also algorithmic management.
The outcome of the rulings is heterogeneous and sometimes contradictory.
Below is a non-exhaustive overview of the most important of such rulings.
[The UK Supreme Court ruling of February 2021]
The UK Supreme Court ruling (19/02), which refers to a case brought by
Uber drivers in 2016 against the British subsidiary of Uber, confirms a trend
in judiciary thinking that we have recently been witnessing across Europe.
The British judges based their ruling on a factual assessment of Uber
drivers’ working conditions.
They concluded that
digital labour platforms cannot unilaterally decide
what is the employment status of people providing services through
them. The employment status of people working through platforms must be
empirically verifiable.
Similarly, with other court rulings on platform work in Spain, Italy and France,
the UK Supreme Court explained that Uber drivers are in a position of
subordination and dependency in relation to Uber.
They have no ability to improve their economic position through their own
skills, as would be the case with entrepreneurs. In practice, the only way in
which they can increase their earnings is by working longer hours while
constantly meeting Uber’s measures of performance.
Importantly, the UK Supreme Court also ruled that Uber drivers’ working time
calculation must also include the time spent logged-in the app while waiting
to be assigned a new ride.
In the UK ruling, the judges also assert that contract flexibility
per se is not
incompatible with an employment contract.
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As a response to the court ruling,
Uber accepted the reclassification of its
British drivers as ‘workers’ (in the UK meaning, see above) thus entitling
them with the right to minimum wages, paid leave and a pension plan.
However,
contrary to the ruling, Uber will not be considering ‘logged-in’
time as ‘working time’, thus calculating a driver’s earned pay from the
moment he/she accepts a ride up to the moment he/se completes it.
Uber has so far disbursed more than USD 600m to comply with the ruling.2
In November 2021, Uber announced it would increase fare prices by 10% in
London, to attract more drivers and put up with the surge in consumer
demand.3
[Two recent French court rulings: Cour d’Appel de Lyon et Cour de Cassation]
On 4 March 2020,
the French Supreme Court (Cour de Cassation) ruled
that an Uber driver was a worker of the platform, and not a self-employed
contractor.
The court upheld a previous decision by a court of appeal, saying the Uber
driver could not qualify as a self-employed contractor because he could not
build his own clientele or set his own prices, making him an employee of the
company.
On 16 January 2021, however, the
Cour d’Appel de Lyon found that an Uber
driver was in fact a self-employed.
The court did not follow the criteria set
out by the Supreme Court one year earlier, relating to the factual control
of the platform over the driver, and instead adopted a more ‘traditional focus’
on the lack of a formal obligation to work and a free determination of
schedule.
[Three recent Dutch court rulings on ‘algorithmic firing’]
In March 2021, a
Dutch court found that Uber did not violate the GDPR
when it terminated the accounts of a group of drivers via an algorithm-
assisted process. The court also told Uber to give drivers access to certain
datasets.
On 14 April 2021, in a different case, it was made public that in February 2021 a
Dutch court ordered Uber to rehire and compensate drivers who argued they
had been “unlawfully dismissed by algorithmic means” in breach of Europe’s
data protection rules. The App Drivers and Couriers Union (ADCU), which
2 Reuters article availabl
e online. 3 CNBC article availabl
e online.
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represents the drivers, welcomed the decision while a spokesperson for Uber said
the company would contest it.
In September 2021,
the Amsterdam District Court ruled that Uber drivers in the
Dutch capital are workers, not self-employed. It also issued a fine of EUR 50,000
which Uber should pay for failing to implement the terms of the collective agreement
for taxi drivers.
The case was filed by trade union FNV, who claimed 4000 drivers in Amsterdam
should be granted worker benefits in line with the taxi sector. Uber said it would
appeal the decision.
Annex
Uber’s White Paper on
A Better Deal for European Platform Workers
Uber White Paper
2021 - A Better Deal.pdf
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Document Outline