The platform economy needs to deliver on sustainable innovation for people and business

In its response to the European Commission’s consultation on platform work, CEC European Managers has highlighted the great potential the platform economy could unleash. For this to happen, the digital development needs to be aligned to the European Pillar of Social rights, the EU Green Deal objectives and fair taxation principles. Today however, the rapid and little-regulated development of platforms causes challenges for some of the features of the European social model.

Although platform work today represents only a very small share of total employment, the growth in platform employment continues growing. Platform workers are today often not considered employees, posing challenges for their social security, the EU’s tax systems and digital rights. That’s why CEC has made clear that all types of platforms and all people working on platforms should be covered by new legislation, irrespective of their formal employment status. Furtermore, negative consequences of poor algorithm design and “automated decision-making” need to be mitigated to the “human-in-control” approach can be respected.

Many technological design decisions have repercussions on working arrangements, social security models and economic sustainability. This includes the questions on how to ensure the financing of our welfare systems (and more in general, the effectiveness of our current models for taxation of business and economic activity) or the role of artificial intelligence and the place algorithm-based mechanisms for surveillance should have in our societies.

For platform service providers, there is a risk of economic dependency on intermediation platforms (more prominent in case platform work represents the main source of income). This situation can evolve further into a condition of abuse of dominance, creating unfair competition and hampering the entry of newcomers on the market. Such dominance can be further exacerbated if we take into due account the additional unfair advantage platforms enjoy: the absence of structural investment duties, no entrepreneurial risk for running the platform and sometimes monopolistic positioning on the market.

When it comes to managers, the development of the platform economy requires solid responsibilities, accountability and highly professional staff. While the managerial population in the EU is shrinking, it is important to highlight that the growth in the platform economy – one of the many aspects of the new world of work – requires a deeper analysis of the role and contribution of managers be made. Better incentives are needed to cultivate a more sustainable and innovative leadership culture to create a platform economy in the interest of the EU’s long-term resilience, sustainable employment, and distributed innovation. To develop the platform economy within a stakeholder approach, the participation of social partners at all levels seems crucial.

More information
Please find the response of CEC European Managers to the consultation on platform work here