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What does it mean to be "employed" in the gig economy?

A person uses the Uber app on his iPhone in Times Square in New York City.  iStock/Getty Images

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This week the European Parliament passed a law establishing basic rights for workers in the gig economy. It could apply to some 3 million people, everyone from Uber drivers to couriers for the United Kingdom’s Deliveroo. The law requires companies to pay when work is canceled last minute or for mandatory training. It also bans “exclusivity clauses,” which prevent freelancers from “gigging” for other companies. It’s supposed to make working short-term gigs a little more stable.

Marketplace’s Amy Scott talked with Joe Miller, a business and tech reporter with the BBC who’s been following this law. The following is an edited transcript of their conversation.

Joe Miller: It was mainly targeted at the Ubers of this world and things like TaskRabbit, essentially app-based services that supply on-demand services such as transport or delivery. But in reality, the legislation encompasses a far broader section of the economy. It includes people who clean offices, people who work for parcel delivery companies. The legislation could apply to a far, far broader sector than just those big tech firms that we’ve all come to know.

Amy Scott: Why are these changes needed? What kinds of abuses were workers talking about that this law is trying to address?

Miller: The range of abuses is really quite massive, from people who’ve been booked for work and then never being given that work, being left in the lurch with no work and no pay, to people who have worked hundreds of days a year without any holiday pay, people not being offered any compensation when they’re sick, despite working for the same company essentially for many, many months or weeks. There’s been an awful lot of activism around this and an awful lot of legal challenges around this, with people coming forward with all sorts of employment concerns.

Scott: These member states have up to three years to begin to enforce this. That seems like a long time with a lot of room for maneuvering.

Miller: It is a long time, but critics would also point out that this only applies to people who are employed. They’re tightening up the definition of who’s employed. They’re saying if you work three hours a week for a company, then that is considered employment. But, of course, the big battlefield between the likes of Uber and Lyft and Deliveroo around the world and various authorities has been they’ve always claimed that they are just the facilitator between a customer and a self-employed contractor. That is not covered by this legislation because this legislation narrowly only applies to people who are employed. You can expect there to be many, many challenges on the definition of who is employed. This doesn’t really solve anything in the immediate future. It’s just a blueprint of how things may look.

Related links: more insight from Amy Scott

What could this European law mean for American workers? Miller says think about what happened with the General Data Protection Regulation, the European privacy regulation that took effect last year. It led a lot of tech companies to change their practices here, too.

Here in the United States, the rise of the gig economy may be distorting some economic data. Over at Axios, frequent Marketplace guest Dion Rabouin wrote about a new paper from the Dallas Fed. It says the headline unemployment rate, now at 3.8%, may lowball the number of gig workers who are unemployed or underemployed. Because contract workers aren’t on the payroll, they aren’t counted as “unemployed” even when they aren’t working.

And the Ithaca Times has another interesting story about gig workers. Cornell University surveyed New Yorkers who use platforms like Uber, Postmates and Grubhub to make a living. Among the 270 people surveyed, only 13% said they could get by working for those apps alone. Many relied on public assistance and juggled several apps at once to make ends meet.

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