Uber and Peers Face Defeat in Spanish Struggle Over Courier Employment

Uber Technologies Inc. and other digital platforms are facing a setback in their attempts to avoid the reclassification of workers as employees, after Spain’s government finalized plans for the strictest regulatory reforms in Europe so far on delivery work.

Spain’s government said late Wednesday that it had reached an agreement with unions and business organizations to regulate the employment conditions of delivery workers who work via digital platforms such as Uber Eats or Amazon.com Inc.-backed Deliveroo. The rules would require companies to contract their workers and disclose details of the platforms’ algorithms that affect working conditions.

The proposals are a defeat for the digital platforms in their efforts to influence legislation on the gig economy in Europe. The companies had hoped to reach an arrangement similar to one struck in Italy, in which they offered minimum pay and other benefits to couriers, but avoided reclassification of their workers as employees.

The proposals could set a precedent, with the European Union’s executive branch having warned that it will put forward legislation on work via digital platforms by the end of the year unless companies negotiate with their workers.

Uber, Deliveroo and local delivery startups such as Glovo and Stuart will now have to consider the need to change their business models. While no dates have been set for the rules to come into force, the Spanish government has said platforms will have three months to adapt their business models.

One possible solution is to adopt the model of major European food-delivery platform Just Eat Takeaway.com NV, which uses third-party employees, but also has a smaller proportion of restaurant deals where it handles the logistics of delivery.

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On Thursday, Uber and Deliveroo criticized the proposed reforms for ignoring the wishes of many couriers who they say would prefer to work as self-employed contractors. But the companies didn’t say whether they intended to make changes to their business.

“At Uber, we are fully committed to raising the standard of work and giving independent workers more benefits while preserving flexibility and control. We want to work with all relevant parties across Spain to improve independent work, instead of eliminating it,” a spokesperson for Uber said.

An estimated 30,000 couriers currently work with food-delivery platforms in Spain, often working for multiple companies. A number of riders’ associations that support self-employed status have organized protests in recent weeks against the proposed reforms, though other workers’ groups criticized the reforms for being narrowly focused on the delivery sector.

“We will continue to engage with the Spanish government to seek alternative ways forward. We urge the government to listen to riders and urgently think again,” a spokesperson for Deliveroo said.

Write to Adam Clark at adam.clark@wsj.com

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