Spain’s government has reached an agreement with trade unions and business associations over labor reforms that will see delivery platform couriers recognized as employees, it said today.

Once such a law is passed, the development could have major ramifications for platforms operating in the market — which include the likes of Deliveroo, Glovo and UberEats, to name a few.

“The Ministry of Labor and Social Economy, the trade union organizations CCOO and UGT and the business organizations CEOE and CEPYME have reached an agreement to establish the employment status of workers dedicated to the delivery or distribution of any consumer product or merchandise through platforms digital,” the ministry said in a statement (which we’ve translated from Spanish)

“The agreement recognizes the presumption of employment of workers who provide services through digital delivery platforms, in line with the Supreme Court ruling,” it added.

“The presumption of employment is recognized for workers who provide paid distribution services through companies that manage this work through algorithmic management of the service or working conditions, through a digital platform.”

Agreement on the reform means the government can now start to move forward with the legislative process after many months negotiating on exactly how to change labor laws.

The timing looks especially interesting as the European Union is also considering how to improve conditions for gig workers more broadly — so Spain’s plan to legislate, ahead of other EU countries, to recognize a subset of gig workers as employees could be influential in shaping wider regional policy.

Wider reforms in Spain aimed at supporting growth of digital business also come with a strong social inclusion component, with the government saying no one should be left behind in a drive to modernize.

The labor reform agreement follows a number of legal challenges in Spain in recent years over the classification of delivery riders. There have been varying outcomes in the courts but last year Spain’s Supreme Court ruled against homegrown delivery platform, Glovo, in a case relating to the employment classification of a courier — putting a stamp of finality on the matter as it also declined to refer questions to Europe’s top court.

Delivery platforms in the market have suggested the impact of the planned reform could result in thousands of couriers losing their source of income.

Up to 30,000 couriers are reported to provide services on delivery platforms in Spain.

There have also been accusations that platforms are being unfairly singled out as a politically easier target vs other more established industries which also rely on labor provided by ‘autónomos‘ (self-employed) workers.

However delivery startups have been less vocal about what a legal requirement to put couriers on the payroll would mean for their business model — or, indeed, their (ongoing) quest for profitability.

Responding to news of Spain’s labor reform agreement, Mark Tluszcz, CEO at Mangrove Capital Partners — who has been a long time critic of the gig platform business model — told TechCrunch: “We have long taken the view that gig platforms would have to go through significant structural changes driven by individual countries laws. Unless gig workers are recognized as employees, we risk creating a subclass of workers that dont have adequate rights or social coverage. The pandemic has clearly illustrated the need to ensure all workers have protections and it is increasingly difficult for gig platforms to argue otherwise.”

In an interesting additional component to the reform agreement announced today, the government said the incoming legislation will require that workers’ legal representatives are informed of the criteria powering any algorithms or AI systems that are used to manage them and which may affect their working conditions.

Its statement specifies that this includes algorithmic systems that are related to access to employment and for any rating systems that monitor performance or profile workers.

This component looks like it’s taking inspiration from a number of recent legal challenges in Europe which have focused on ride-hailing platforms’ algorithmic management and drives’ access to data the platforms hold on them.

James Farrer, a former Uber driver who successfully challenged the company’s employment classification in the UK — where the Supreme Court recently held that the challenging drivers are workers — and who is also involved in the more recent algorithm and data access challenges, has set up a not-for-profit with the aim of establishing a data trust for drivers for the purpose of collective bargaining.

Spain’s unions appear to be taking a similar tack by pushing for access to the algorithmic rules that are used to manage couriers as a tool to tackle the power asymmetry between platforms and workers.

A spokesperson for Uber sent us this statement in response to the Spanish government’s announcement:

“Over the past few weeks, thousands of couriers across the country have come together to stand against this proposed regulation that would deprive them from the independence they value most. 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.”

Deliveroo also sent us this statement:

This proposal goes against the interests of riders who value flexible work, restaurants who benefit from delivery services and customers who value on-demand delivery. Thousands of riders who took to the streets to protest their desire to remain self-employed have had their voices ignored.

“Delivery platforms have put forward constructive proposals to enable riders to work flexibly with additional security and have warned that forced reclassification will lead to less work for riders, will hurt the restaurant sector and will restrict the areas where platforms can operate. Unfortunately these messages have also been overlooked.

“Nothing has been finalised and we will continue to argue that the Government should provide riders with flexibility and security, which is what they want. 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.

Glovo declined to make a statement at this time.

In recent weeks, Uber has been lobbying for deregulation for platform workers in Europe ahead of the EU’s consultation process on improving gig work — seeing the possibility of a pan-EU framework as an opportunity to reshape regional employment rules to better mesh with modern working patterns. However the move has led to criticism that it’s trying to lower EU standards.