Publication of an ESIP study on the coverage of platform workers

The impact of digitalization, especially of the platform economy, is a burning topic in Europe. The number of publications on the size of platform economy and its impact on labour markets is growing. According to the most quoted figure in the EU, the share of people working in the platform economy ranges between 1 and 5 per cent. The views are somewhat polarized, as some see the phenomenon as rupturing the labour market while others find that its impact is minor (at least for now). Less attention has been given to its interplay with social insurance. That is why ESIP decided to take a closer look at that part of the phenomenon.

Our study focussed on platform economy and its implications for social insurance. The study is based on a survey sent to social insurance institutions. It is a comparative study that covers all branches of social security and the platform economy. Thus it offers an interesting insight for researchers and policy experts into this topic.

One of the main conclusions we have drawn based on our study is that some of the challenges that relate to platform work are due to the work often being done as a sideline. That means that the income streams from platform work are small, which leads to the following challenges.

  1. In social insurance, the main divider is linked to employment status. In most countries, people who are active on the labour markets are either employees or self-employed. The same division applies largely to the platform economy. This is a very complex issue as the platforms often consider themselves as merely matching the supply and demand for labour, not as employers. However, they often have the authority to designate gigs or give preference to certain individuals when designating gigs. This gives them more power and control than if they were merely matching supply and demand.
  1. Often similar types of platform work can be conducted either as an employee or as a self-employed person, blurring the line between the different employment statutes. Food courier services that are omnipresent in Europe are prime examples of this. Some of the food courier platforms offer employment contracts and others do not. This is not a problem if the platform worker is aware of the rights and risks related to the employment status. However, this does not always seem to be the case. On average, it could be stated that employees have a wider mandatory coverage in social security. Especially those working as self-employed should be made aware of their rights and obligations related to their status.
  1. The income from platform work often provides a side income. This can pose challenges if neither digital platform work nor traditional labour gives the right to social benefits, such as unemployment benefits. The thresholds for access to social protection of the self-employed – and maybe even of the employed – may need to be revised in some countries. For example, there is no mandatory pension insurance coverage for the self-employed in Germany.
  1. Digital platforms operate globally, which is a real challenge. It remains to be solved how national laws can be enforced in a global context, especially if the platform operator resides outside of Europe. An interesting example is provided by Belgium that has enacted special laws that apply to platform work. Income under a certain threshold is taxed, but no social contributions are levied. Some of the tax revenue is used to finance social protection of the self-employed. This legal framework aims to attract platforms to register themselves, which would bring them under the supervision of national authorities.

Find out more in our study.