(Bloomberg) — Shares of Deliveroo Plc and Delivery Hero SE both fell in early London trading after Bloomberg reported millions of people working for such apps could be reclassified as employees after a European Union labor rights plan.
Deliveroo fell as much as 5.7% to 248 pence a share in London on Friday, extended the stock’s decline for the year to date to 35.5%. Delivery Hero shares were down as much as 2.7% to 104.5 cents in Frankfurt on Friday, and 17.6% for the year.
The European Commission is set to push countries to reclassify as many as 4.1 million gig economy workers including food couriers and ride-hailing drivers as employees regardless of what their contracts state. Platforms, rather than the worker, would bear the burden of proving that they are not employees.
The proposal, which will be published December 8, will be “grist for the mill of those wanting the gig economy to be eradicated,” Jefferies analyst Giles Thorne and colleagues wrote in a note to clients on Friday.
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