A New Perspective on Platform Work: Commonalities and Disparities between Platform Workers and Franchises

A New Perspective on Platform Work:
Commonalities and Disparities Between Platform Workers and Franchisees

Abstract 30 June 2017 for Reshaping Work in the Platform Economy, Amsterdam, October 19 & 20, 2017

Author: mr. dr J.H. (Hanneke) Bennaars,
researcher at the Hugo Sinzheimer Institute/ University of Amsterdam

ABSTRACT

Academic labour law debate on platform workers is often dominated by the question whether these workers should be classified as employees or as self-employed workers. Classification and misclassification queries are as old as employment law is; now the technological aspects of the gig-economy create new challenges. Seemingly, new types of relationships have emerged.1 Classification issues motivate discussion on regulation. If platform workers are to be considered employees, their position is regulated through labour law. If they are to be considered self-employed, in principle labour law does not apply.2

If one assumes that platform workers are self-employed, it is interesting to see to what extent they can be considered franchisees and to what extent such classification creates possibilities for regulation.

Earlier this year, the US Federal Trade Commission ('FTC') filed suit against Uber alleging, inter alia, that Uber misrepresented drivers’ earnings.3 The court entered a Stipulated Order prohibiting Uber from misrepresenting; Uber settled for $ 20 million.4 The FTC issued regulations in the '70-s requiring franchisors to make extensive disclosures and forbidding misrepresentations in the offering process with prospective franchisees. The consented judgment has some similarities to the FTC's franchise disclosure rule, although this does not apply generally to platform providers.

Dutch law lacks statutory regulation governing franchise agreements; general contract law is applicable. The Dutch franchise industry established a code of conduct,5 inspired by the European code of conduct for the industry.6 The code contains, inter alia, disclosure obligations and stipulations regarding post contractual covenants such as non-competition covenants. Recently, the Dutch government launched a consultation regarding a legislative proposal aimed at creating a statutory basis for the national code of conduct.

These developments justify an exploration on similarities and differences between platform workers and franchisees, while taking into consideration obvious differences between these workers due to the specifics of their platform of origin. In my paper I describe the rights and obligations of franchisees and franchisors in the Netherlands, making references to other European jurisdictions and to the US. Further, I analyze the commonalities and disparities between platform workers and franchisees and, finally, potential regulation for platform work is explored, inspired on the contemplated new legislation.

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1 The technological aspect should not be exaggerated though, I refer to the North California District Court rejecting Ubers assertion that it was a technology company: 'Uber does not simply sell software; it sells rides. Uber is no more a 'technology company" than Yellow Cab is a "technology company" because it uses CB radios to dispatch taxi cabs', Case 3:13-cv-034260EMC, 11 March 2015, p. 10.

2 In some European jurisdictions self-employed workers have some protection, either because the jurisdiction knows some kind of intermediate category or because certain labour law rules have an extended scope and cover self-employed workers.
3 Complaint for Permanent Injunction and Other Equitable Relief, FTC v. Uber Technologies, Inc., (N.D. Cal. Filed Jan. 17, 2017), available at https://www.ftc.gov/system/files/documents/cases/1523082ubercmplt.pdf.

4 Stipulated Order for Permanent Injunction and Monetary Judgment, FTC v. Uber Technologies, Case No. 3:7- cv-00261-JST (N.D. Cal. Feb. 2, 2017), available at https://www.ftc.gov/system/files/documents/cases/uber_final_order.pdf.
5 https://www.rijksoverheid.nl/documenten/rapporten/2016/02/17/de-nederlandse-franchise-code

6 The European Code of Ethics for Franchising, http://www.eff-franchise.com/77/regulation.html.