Shares rebound ahead of proposed European rule change

AMSTERDAM Reuters -- Shares in ride-sharing and food delivery companies rebounded on Tuesday, ahead of an European Commission proposal that defines when couriers should be considered employees and when they should be considered independent contractors.

The proposal, which is under development for years, will put the burden of proof on companies, rather than workers, to show when their delivery people are self-employed, according to the Financial Times on Tuesday.

A spokesman for the European Commission wouldn't say anything until its publication on Thursday.

The Netherlands' Just Eat Takeaway.com rose 6.3% by 1030 GMT, Germany's Delivery Hero increased 4.5, and Britain's Deliveroo was up 1.9%, reversing similar declines on Monday, in an apparent relief rally to recover some on Monday's losses. In the United States, Uber shares closed at $38.49.

Analysts for Citi said that Deliveroo is most heavily exposed to the proposed rule change, while larger European rival Takeaway already uses an employment model. Delivery Hero and Uber have larger operations in non-European markets.

At present, gig economy workers in Europe are considered self-employed, relieving companies of the obligation to pay minimum wage or give them sick leave or holiday pay.

In the past two years, court decisions in the Netherlands, Britain, Italy and Spain have challenged that.

The proposal could lead to the reclassification of 4.1 million contractors as employees, leading to 484 million euros $545 million in extra annual pay and giving them the same rights and protections as other employees under European law.

A study by Copenhagen Economics, commissioned by an industry group for platform companies last month, argued that the new European rules could lead to the loss of 75,000 jobs.