Spanish rule protecting gig-economy riders leads to labour shortage, Uber says

MADRID, March 8 (Reuters) - A Spanish law passed last year forcing food delivery companies to contract their couriers as staff has caused a labour shortage as many prefer to remain self-employed and work for rivals that flout the regulation, Uber Eats said on Tuesday.

The Spanish branch of Uber's (UBER.N) online food delivery platform published on Tuesday an open letter to the Labour Ministry complaining that the contracts it offered to freelance 'riders' failed to retain enough of them to assure its services.

"Our fleets of collaborators can't find enough couriers because these prefer to be self-employed to work with Glovo,... the only company that allows it, against the Rider Law," Uber Eats said, referring to the May 2021 decree demanding firms grant formal work contracts to protect gig-economy workers.

A spokesperson for Glovo said the company, which has been taken over by Germany's Delivery Heros (DHER.DE), did not break any law and said it had taken steps to ensure it complied.

The Uber Eats letter fuels a European controversy over the legal status of the thousands of cyclists who criss-cross city centres with oversized branded backpacks, and who generally lack benefits such as minimum wage, paid holidays and pension rights.

The European Commission in December recommended other EU countries follow Spain's lead, a move that is long overdue, according to unions, but which firms say may lead to job losses.

The Labour Ministry said it demanded all platforms abide by the new law. "The majority of digital platforms respect this rule," the ministry said, without mentioning any names of firms that did not adhere to the rules.

The Spanish decree, backed by trade unions and business associations, was met with scepticism by several riders associations and labour experts who said the new legislation did not completely resolve the legal situation of the couriers.

Uber Eats said couriers preferred the flexibility to focus on lucrative rush hours they enjoy as self-employed than the better social protection work contracts offered, but which also came with requirements to work at other less lucrative times.

Reporting by Christina Thykjaer, Editing by Inti Landauro and Edmund Blair

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