Consumers may face higher prices to save employees from AI, automation, says EU Commissioner

Consumers in the European Union (EU) might experience higher prices to fund enhanced rights for gig workers, but this won’t jeopardize the industry’s business model, according to Nicolas Schmit, the EU’s Commissioner for Jobs and Social Rights.

In discussions around a potential directive, which, if passed, would compel ride-sharing and delivery companies like Uber and Deliveroo to provide greater social protections to workers on their platforms, EU officials estimate that service prices, such as those for Uber, could surge by up to 40 per cent.

Schmit expressed confidence that consumers would accept the price hikes if it meant improved conditions for gig workers. He emphasised the necessity for a balance between the interests of consumers and service providers in the economy, stating that there is a cost that “has to be paid” to ensure fair worker rights.

The directive, currently under debate by the European Parliament, member states, and the European Commission, is expected to reach its final phase by the end of November.

Addressing concerns raised by Anabel Díaz, head of Uber’s mobility division in Europe, who warned of potential shutdowns in hundreds of EU cities if prices rose significantly, Schmit dismissed the notion that better worker protection would kill the industry’s model.

He likened Uber’s argument to historical instances of scaremongering, emphasizing the need for businesses to adapt rather than threatening legislative bodies.

Schmit referred to ongoing court cases in Europe as evidence of the need for a new directive to provide clarity for businesses.

He pointed out that the UK’s recent Supreme Court ruling on Deliveroo riders and the 2021 UK court ruling designating Uber drivers as “workers” highlight the lack of clarity in the gig economy.

The proposed directive aims to clarify the status of platform workers, allowing them to remain self-employed without being considered “bogus self-employed.”

(With input from agencies)

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