Much has been said over the last decade about the disruption caused by gig economy platforms in local labour markets, particularly their role in degrading working conditions and creating intricate regulatory challenges. However, far less attention has been paid to the scope and impact of institutional responses emerging globally to counter this threat – and to redefine the future of work. This raises a question that may sound simple but is far from trivial: Have things truly changed? Are precarious working conditions being resolved, or are they merely taking on new forms?
At first glance, it could be argued that much of the political effort to confront platform capitalism has remained anchored in the realm of regulatory enactment. On the one hand, workers’ organisation and resistance have flourished globally, taking diverse forms. A common thread, however, is the reliance on legal enactment as a central strategy in trade unionism. Conflicts often materialise through litigation, legal mobilisation and campaigns for statutory recognition, with the state frequently becoming the focal point of these efforts – partly due to the absence of other viable levers of power to challenge platform companies. On the other hand, by 2024, states in over 30 countries (and counting) had introduced new legal instruments to regulate platform work. These measures have either directly addressed the challenge of defining the employment relationship, or adopted broader, often indirect legal frameworks, such as transport or social security laws.
Yet legal enactment is far from the end of the story. Years of struggles across various regions have made it increasingly clear that the battleground has shifted to issues of regulatory enforcement and compliance. For unions, legal advocates and employment relations researchers, this shift is hardly surprising: employers have historically contested labour regulations, particularly in contexts where enforcement mechanisms are weak. But this demands a fresh perspective, as the very credibility of regulation hangs in the balance, influencing the trajectories of institutional change in the digital age. Concrete examples of regulatory change, beyond the analysis of legal enactment, could offer valuable lessons to address this puzzle.
Spain and Chile exemplify two contrasting regulatory approaches worth examining. Spain acted early to regulate the ride-hailing sector through transport laws, granting regional governments significant autonomy to establish procedural rules and enforcement mechanisms. In the delivery sector, the 2021 Rider Law’ introduced a presumption of employment status – a landmark provision that partially inspired the recently approved EU Platform Work Directive. Chile, by contrast, introduced a third category for platform workers, extending certain employment-type protections to freelancers across both ride-hailing and delivery sectors. This hybrid model mirrors efforts in other countries that have experimented with intermediate legal categories in the past to address misclassification (although the terms and scope of these categories vary considerably in each jurisdiction).
These categories aim to grant rights to workers who do not fit neatly into traditional classifications of employees or independent contractors. However, this approach does not automatically reclassify workers; it rather expands the regulatory options for governing labour relationships. A clear example of this can be seen in the UK, where high-profile court rulings have determined that ride-hailing drivers, such as those working for Uber and more recently Bolt, qualify as ‘workers’ under British law, falling under the third category available, the limb (b) worker category. Yet, for delivery riders, this possibility has been systematically rejected by the courts.
So, how have platforms responded to these distinct institutional arrangements? In Spain, ride-hailing platforms partnered with private hire vehicle licence companies to operate legally, subcontracting drivers through these intermediaries. Initially, this arrangement provided some protections, particularly in cities like Madrid, where large unions negotiated a sector-wide collective agreement. However, subcontractors have started contesting their classification, claiming to be ‘false employees’, as neither working hours nor the legally stipulated hourly wages for actual employees are respected. What is more, the Labour Inspectorate has accused these intermediaries of illegal assignment of workers’ practices, arguing that they act as mere façades while platforms retain operational control. This arrangement has also entrenched local vested interests, as licencing companies have become increasingly dependent on the platforms’ marketplaces, which, in turn, is amplifying platforms’ infrastructural power across the country.
The Rider Law has signalled a shift in a similar direction, as the celebrated presumption of employment ultimately meant that someone – though not necessarily the platforms – had to employ the workers. Intermediaries have gained ground here too, though responses have varied. Some platforms, such as Deliveroo, exited Spain in 2021, claiming the law was incompatible with their business model. Others, including Uber Eats, Just Eat and Glovo, saw opportunities for expansion. Just Eat is the company most proud of complying with the regulation, signing collective agreements and internalising a small portion of its workforce, though much of its labour force, like that of other delivery companies, remains subcontracted under irregular conditions. Glovo, on the other hand, openly defied the law, asserting it had restructured its work organisation to eliminate signs of subordination and algorithmic control. This defiance triggered investigations by the Labour Inspectorate, but Glovo’s rebellion was backed by substantial corporate support: Its parent company, Delivery Hero (Europe’s largest), pledged to cover fines for misclassification cases – a bold move likely driven by its regional market power. Recently, this story took a new turn when Glovo announced it would hire its roughly 15,000 couriers, though concerns remain about the conditions under which this will happen – if it happens at all.
Chile, by introducing a hybrid category that extends labour protections to non-labour contracts, presents a different scenario: one of unchecked compliance. Without a presumption of employment, both workers and companies can, in theory, choose the regulatory framework that applies in each case. Unsurprisingly, nearly all workers remain classified as self-employed. Reports from Fairwork Chile and the Ministry of Labour confirm this trend two years after the law’s enactment. Are these workers truly self-employed? Probably not, but the political space to challenge this classification now seems limited. Concerns have shifted toward more modest objectives, such as the formalisation of these workers.
In sum, Spain’s regulation shows greater resilience in establishing minimum standards, while Chile’s hybrid model aligns more closely with platforms’ employment preferences. However, this outcome cannot be understood solely through the regulation, as it reflects the underlying political process, where unions, the government and legal institutions in Spain have maintained a commitment to addressing precarious labour conditions linked to platform growth, whereas in Chile, unions have had minimal sociopolitical influence, and institutions mostly favoured the expansion of these companies. Yet Spain’s approach also fails to address key challenges. While its legal instruments obsessively target bogus self-employment, they overlook the pervasive growth of agency work, which platforms enable by providing infrastructure for contingent arrangements like subcontracting. This, in turn, fosters intermediary markets that would not exist under purely freelance models.
Do these examples point to divergent institutional trajectories? To some extent, yes. Spain illustrates a case of layering, where legislation adds novel rules to existing frameworks, although this has still led to persistent instability and conflict. Chile, in contrast, reflects institutional conversion, one which undermines the labour protection system. Given the low enforcement capacities of the Labour Inspectorate, the introduction of this new law in the Latin American country has done little more than facilitate the avoidance of employment formalisation, leading to a scenario dominated by unchecked compliance and opportunistic practices by platforms. It is therefore correct to say that the latter approach is clearly more functional to the accumulation regime of platforms, but the former, the one adopted in Spain, does not resolve the underlying issues either.
Undoubtedly, institutional regulation plays – and will continue to play – a key role in the future of the platform economy. However, we must proceed with caution when clarifying the ultimate aim of the regulation we need. We cannot overlook the fact that Digital Labour Platforms, as they stand, have delivered neither profits nor decent work. Perhaps the starting point is not simply to regulate these companies more rigorously, but to challenge the assumption that their growth inherently fosters development. The real solution may lie in identifying regulations and institutions capable of addressing this prolonged economic malaise – creating pathways for better jobs, fairer wages and more equitable growth. Without such a shift, merely tightening the rules on platforms, though commendable, risks falling far short of resolving the deeper structural issues at play.
Angel Martin-Caballero is a sociologist and PhD researcher at the Work & Equalities Institute, University of Manchester. His research focuses on employment regulation, the role of digital platforms in shaping work and governance, and the dynamics of labour market inequalities and institutional change.
Image credit: Shashank Verma via Unsplash
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