Regulation of Digital Platforms Could Protect Labor Rights

To guarantee the labor rights of drivers and couriers, Mexican legislators seek to regulate the digital platforms that offer travel or food delivery services arguing that the new job modalities of the digital economy have denied labor and social security rights.

"Advancing in technology matters and new forms of employment does not have to come with exclusion from social security, loss of protection and rights," argued Luisa María Alcalde, Head of the Ministry of Labor and Social Welfare (STPS).

These regulations target mainly apps such as Uber, Rappi, Didi and Beat, which have experienced between 5-50 percent growth within the last decade.

The decision would benefit the over 500,000 drivers and couriers registered in the country that make less than US$2 per hour with weekly working schedules of up to 65 hours, according to IMSS and the International Labor Organization (ILO).

Experts agree that the use of the term “partners” by digital platforms when referring to drivers and couriers, hinders the debate around whether these workers are employees or contractors, which affects their laboring rights. This nebulous label allows apps to disregard employment relationships, therefore not assuming the responsibility of guaranteeing minimum wage and the freedom to form unions, as well as failing to provide severance pay, vacations and social security, among other labor rights.

"The classification of the worker depends on the characteristics of the relationship between the parties. This is not a minor issue. Being a formal salaried worker implies having broad labor protection and social security system," argues the Inter-American Development Bank (IDB).

The IDB also argues that even if the drivers and couriers interact directly with the clients who rate them, the digital platforms are the ones recruiting, managing human talent and paying the employees, which converts these apps into direct employers.

However, for the regulation efforts to be successful, policymakers need to distinguish between applications that are truly intermediary from the service providers that in practice may have a disguised employment relationship, declared researcher Graciela Bensusán.

"The fear that emerging occupations in the digital economy will deepen the precariousness and informalization of jobs in the region cannot be seen only as a result of globalization and technological transformations, but also of political decisions that have reinforced adverse trends in the labor market. There is no doubt that technology has been used to avoid employer responsibilities and reduce labor costs," Bensusán explains