Marin began working for Glovo in Zagreb in March 2022, drawn to the delivery service’s promise of a “fun way to earn” and “freedom to set your own working hours”.
‘Fun’ and ‘freedom’ came at a price, however.
Not formally employed by the digital courier giant, Marin [not his real name] couldn’t be paid directly into his personal bank account, so managers at Glovo recommended he try an intermediary, a so-called aggregator, which would become his official employer.
For this, the aggregator took 10 per cent of Marin’s earnings. And those earnings began to land late.
“I received my August salary on October 5,” Marin told BIRN. “That’s a big delay.” Taking his troubles to Glovo, Marin said he was “told to contact my employer, the aggregator. That was basically it. In a sense, you’re on your own.”
From food delivery to home cleaning, ride hailing to marketing, tens of millions of so-called ‘platform workers’ around the world earn money via digital platforms that connect buyers and sellers of goods and services.
Reportedly, in Croatia, an estimated 80 per cent of such workers choose to be employed by an aggregator, while the rest register as self-employed. Platform workers and labour unions say labour violations are rife, with many aggregators opting to pay workers partly in cash and thus lowering the level of social security contributions and taxes; workers invariably work longer than the hours stipulated in their contracts.
Meanwhile, digital giants like Spanish Glovo or San Francisco-based ride-hail app Uber are free from many of the responsibilities that come with formal employment.
“Aggregators do the dirty part of the job so the platforms don’t have to,” said Ivan [not his real name], who drives for Uber and Tallinn-based Bolt. “Uber doesn’t care if the social security contributions aren’t paid or if the worker doesn’t have the right to a paid vacation.”
Ivan and Marin spoke on condition of anonymity for fear of jeopardising their work.
Photo: BIRN/Anja Vladisavljevic.
Cash is king
The use of algorithms by digital platforms to monitor and even discipline platform workers is well-known, but less so are the more old-fashioned ways in which workers are exploited – by real people in the intermediaries that ‘hire’ them.
The European Union estimates that some 28 million people in the bloc work via digital labour platforms, a number that is expected to rise to 43 million by 2025.
In Croatia, which joined the EU in 2013, there are an estimated 194,000 platform workers, out of a workforce of roughly 1.7 million. A big majority are employed by aggregators, which charge fees ranging between five and 10 per cent of a person’s earnings, according to adverts posted online. Some workers complain of even higher rates.
According to the Croatian branch of Bolt, aggregators can employ people who are not otherwise in a position to open their own businesses. “Aggregators also allow for greater flexibility in working and access to additional work equipment, such as a car or scooter,” it told BIRN.
Ivan said there was also a fear of the bureaucracy involved in going self-employed. “They’re afraid of the paperwork and they don’t see this as a long-term job,” he said. “They just want to earn as much money as they can as fast as possible.”
Freedom from red tape has its downsides, however.
In July 2021, police in the southern Croatian tourism mecca Dubrovnik filed criminal charges against two representatives of a company providing taxi services on suspicion of failing to pay wages, violating social security rights and evading tax and customs to the tune of more than 132,000 euros.
According to police, the company employed 16 people, mostly part-time, but paid only a part of their salaries into their bank accounts and the rest in cash. Another 26 people worked on an occasional basis, without contracts, and were paid solely in cash.
Police confirmed for BIRN that “a digital taxi service platform” was involved, while local media reported that the men were hiring drivers for Uber. BIRN asked Uber about the case but did not receive a reply.
Contract irregularities and the prevalence of undeclared work are the kinds of problems unions in Croatia are witnessing, said Suncica Brnardic, a legal adviser at the Union of Autonomous Trade Unions of Croatia, SSSH.
Brnardic said some workers feel they have little choice but to agree to such irregular contracts and to forgo labour protections because they prefer to be paid in cash, perhaps because their bank accounts have been frozen or they are in foreclosure.
Ivan said some of his Uber and Bolt colleagues want to be paid under the table because they are already retired or receiving unemployment benefits, “so they want to keep going like this for as long as they can.”
It is not known exactly how many aggregators operate in Croatia, but BIRN identified at least 42 by analysing job ads on websites and social media. Roughly two thirds are less than three years old. And their earnings are growing, according to an analysis of financial data from the FinInfo private business register.
Between 2019 and 2021, the total revenue of these companies shot up from just over one million euros to 14.6 million.
Under Croatian labour law, an employer provides work for an employee and pays a salary for the work performed; an employee is obliged to perform the work according to the employer’s instructions. Since aggregators in Croatia currently act as employers of platform workers, they should set their pay-check in advance and give them instructions on how to perform their work. So, besides many irregularities with contracts, the way aggregators operate in general is actually not compatible with the principle of employment, said Brnardic.
Aggregators do not determine in advance the salary a worker will receive, since it depends on the app, nor do they tell the employee how and when to work. Aggregator employees are also not entitled to paid vacation or sick leave. So Brnardic questions whether there is really a legal basis to consider such aggregators’ employers.
“You can forget about paid sick leave or vacation. If you get hit by a car and break a leg, you don’t have paid sick leave,” said Fran, a former Bolt deliverer who changed five aggregators in just over a year of working for platforms from January 2021, when COVID-19 restrictions meant many people were staying home.
“I had to pay for all of the work equipment by myself – bicycle, mobile phone and internet, charger, gloves, rain jacket. The aggregator just gave me 90 per cent of my earnings and that was its whole purpose. As a joke, a lot of couriers call aggregators alligators.”
“My first day was great; at the time of the second lockdown when practically no one had a job, I had a job that involved riding a bike, exploring the city and listening to music and I earned an average hourly rate of 50 kunas net [6.7 euros],” Fran recalled. “I worked as much as I wanted and when I wanted. Fantastic!”
By May 2022, however, Fran had quit, tired of searching for a “normal” aggregator and unhappy with falling hourly rates and bonuses.
Fran said that he was paid into his bank account, but it was never registered as a pay-check or paid by his aggregators under an official company name, but by a private person as if Fran was receiving money from a friend.
Brnardic compared aggregators to temporary employment agencies, a business model regulated by the Croatian Labour Act. Unlike aggregators, however, an agency takes on the formal obligations of an employer, bears the risks involved in managing a workforce and cannot charge the worker a fee for being assigned to another company, a practice pursued by aggregators but which will become illegal when the new Croatian law comes into effect.
“This type of intermediary is incompatible with who we consider employers,” Brnardic explained. “There is no clear implementation of labour regulation within this model because it’s impossible.”
‘On the shoulders of the workers’
Vowing to regulate the field, lawmakers in December passed a new Labour Act addressing platform work and the role of intermediaries.
Under the changes, which will enter into force in January 2024, aggregators and digital labour platforms are classified as employers.
Aggregators will no longer be allowed to charge workers an intermediary fee, while the digital labour platform will also be liable for the obligations undertaken by the intermediary towards the employee, except when it can prove that the aggregator it works with has registered workers for pension and health insurance, pays salaries regularly, and has no outstanding tax bills.
The new law has faced criticism, not least from the European Trade Union Confederation, ETUC, which wrote to the government in October.
“We fear that legalising the ‘aggregators’ in the legislation would only further shield the digital platforms from their Labour Act obligations as employers (including enforcing such obligations through litigation),” the ETUC wrote. “Workers employed by the ‘aggregator’ would be excluded from the possibility of application of presumption of employment relationship in relation to digital labour platforms.”
Ignacio Doreste, labour market and employment adviser at the ETUC, said that, while intermediaries exist in other EU countries such as Germany, Spain, and Poland, “what is perhaps unique about Croatia is the fact that the government is totally aligned with digital labour platforms.”
“Basically, [the law] is giving legal certainty for digital labour platforms to continue operating in a vacuum in which they can benefit from all the riches saved on the shoulders of the workers,” Doreste told BIRN.
The Croatian Employers’ Association, HUP, did not respond to a request for comment for this story.
Bolt told BIRN that it operates in accordance with Croatian law and that it “expects the same level of ethics in business” from its partners.
The Croatian branches of Glovo and Wolt, another major food delivery platform, responded jointly via a public relations agent, saying that it is in the interests of digital platforms “to work together with trusted partners, be they restaurants, shops or aggregators”.
Platforms usually check the aggregators before they sign contracts with them, including whether they have debts to the tax authorities or their employees.
“Likewise, when working with a partner, if they [digital platforms] receive information that the partner company is not paying deliverers… or that the [company] is engaging in any illegal conduct, and if it is established that this information is correct, they terminate the cooperation,” Glovo and Wolt said.
Both firms welcomed the new Croatian labour law, with the exception of a provision requiring platforms to conduct monthly monitoring of the aggregators they work with.
“Exposing digital platforms to additional administrative burdens and imposing stricter rules – compared to those applicable to other companies – could also slow down the development of this sector, leading to slower improvements in the quality of service,” they said.
Glovo did not respond when asked if it is still working with the aggregator that was repeatedly late in paying Marin and which still owes him money.
EU position uncertain
In December 2021, the EU’s executive arm, the European Commission, proposed a directive seeking to oblige digital labour platforms to take on the obligations of traditional employers. The commission said the directive would put an end to the misclassification of millions of platform workers who are incorrectly classified as self-employed even though they fulfil all criteria to be classified as employees, with all the rights that come with that.
Initially, the directive did not touch on the issue of intermediary companies; the Czech presidency of the EU tried to change this, but its amended proposal failed to gain enough support.
The new rules are currently the focus of negotiation between the Commission, the European Parliament, and the Council, so it remains unclear how the bloc will regulate the role of intermediaries. A Commission spokesperson told BIRN that both the Council and the Parliament “are looking into the issue of intermediaries with a view to ensuring that the use of intermediaries does not lead to a lower level of protection for persons performing platform work”.
Doreste, from the ETUC, said that any broader application of the intermediary model would weaken the negotiating position of platform workers vis-a-vis their employers and limit the opportunity to unionise. “Instead of having two million people in Europe working for Deliveroo, we may have only 35 working for one aggregator, 37 for another one, 15 for the third one, so workers are going to be more isolated,” he said.
“Using artificial intermediary companies, the digital labour platforms are going to divide the workforce,” Doreste warned. “This will limit the ability of workers to unite, to get together and join a trade union to be stronger against the employer.”
Marin changed the aggregator he uses as an intermediary but is sceptical that the digital platforms are willing or able to control their partners.
“The work is okay only because you’re flexible; you can easily make your own schedule,” he said, but added: “I don’t think I’ll be [in platform work] much longer.”