European Union member states have rejected a provisional deal that would have reclassified millions of people working for ride-hailing and food-delivery apps as employees. Officials from Spain which holds the bloc’s rotating presidency, decided there was not the necessary majority to pass the deal and sent the issue back for further negotiations with the European Parliament, according to a statement on the European Council’s website.
Last month’s provisional agreement would potentially have cost the gig economy industry billions of euros each year, according to European Commission estimates. It sought to require platforms like Uber Technologies, Deliveroo and others to give full employment status to an estimated 5.5 million workers that are currently classified as self-employed.
Spain will “continue defending an ambitious directive that truly improves the situation of digital platform workers,” despite EU states blocking the regulation. Spain’s state secretary for employment Joaquin Perez wrote in a post on X, formerly twitter.
“EU countries sent a clear signal that the provisional agreement did not deliver on the directive’s goal to improve working conditions for workers and legal certainty to the sector,” a spokesperson for Uber said by email.
The European Trade Union Confederation called on the EU to conclude a new deal within the next six months. The rejected agreement “was far from ideal but finally brought some basic standards to the sector,” confederal secretary Ludovic Voet said in a statement. The European Commission proposed a version of the rules in 2021 to give gig workers stronger protections associated with employment contracts.
The industry would have been on the hook for an additional 4.5bn euros per year based on the number of eligible workers at the time, according to the commission’ estimates. Uber, Bolt and Freenow last month agreed to raise the minimum wage they pay drivers in France ahead of the new rules.
On a different issue – Online bank Revolut has published its delayed accounts for 2022, removing a major hurdle in its bid for a UK banking licence as the fintech firm seeks to boost its operations.
The London-based startup said revenue for the year jumped 45pc to £922.5m (I billion euros) while pre-tax loss was £25.4m down from a restated profit of £39.8m the previous year. It said revenue for 2023 is on track to hit $2bn, with double-digit net profit margin.
The 2022 accounts were released days before the end of December deadline, which had already been extended from September, marking a second consecutive year Revolut has needed more time. Auditors at BDO signed off the statements and said an issue that left it unable to satisfy itself about the completeness of some of Revolut’s revenue data for 2021 had been resolved.
Getting its accounts in order is one of the crucial steps that could pave the way for a UK licence, for which Revolut applied in January 2021, and eventually one for the US as well. CEO Nik Storonsky said in the annual report: “We remain committed to our ongoing UK banking licence application.”
A licence would allow Revolut to offer more loans and even mortgages, allowing it to benefit from the higher interest rates that have boosted margins at large banks over the past few years. In Europe, the challenger will be directly supervised by the European Central Bank as of January, 2024.
“We strengthened our financial position, grew more customer base, launched multiple new products, expanded into new markets, and bolstered our risk, compliance and governance infrastructure,” Storonsky said in a separate statement alongside the results.
The company told investors recently it was on track to generate £1.5bn in revenue this year, suggesting its international growth continue to gather pace. Bloomberg News has reported about 300,000 customers a week are signing up for Revolut’s services. (The writer is our foreign correspondent based in the UK)
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