King's College London

Research by Dr Jimena Valdez at King’s College London examined how governments and platform firms negotiated over the employment status of gig workers in California, Spain, and Denmark.

The findings challenge the assumption that platforms always aggressively resist reclassifying independent contractors as employees. Instead, Dr Valdez’s research suggests a firm’s response is driven in part by the structure of the local welfare state and competitive calculations.

In contribution-based welfare systems like California and Spain, misclassification of workers has created conflicts over unpaid social security. In California, companies like Uber and Lyft leveraged their resources to collectively overturn state legislation via a ballot measure, establishing a hybrid worker category.

However, the situation was markedly different in Spain. Lacking the political tools for a collective override of the government's ‘Rider Law’, platforms turned on each other. While market leader Glovo initially resisted, rivals like Just Eat and UberEats adapted, anticipating lower adjustment costs. The compliant firms then pressured the Spanish government to enforce the rules against Glovo to remove its unfair cost advantage, ultimately forcing uniform compliance across the sector.

Meanwhile, in Denmark’s tax-based welfare system, employment status is less contentious. Some platforms voluntarily reclassified workers as employees without a government mandate. Facing a tight labour market, companies offered employment status to attract reliable workers and streamline tax reporting, turning regulation into a market differentiator.

Dr Valdez, from the Department of European and International Studies, said: “The expansion of gig economy platforms has challenged conventional work arrangements in advanced economies. Governments have started to intervene, yet we know relatively little about what factors shape government initiatives.”

“It is often assumed that all platform firms uniformly oppose regulations, but instead, I have found that their responses are mixed and strategically calculated.”

“Firms make competitive calculations about how to respond to regulatory environments, weighing the costs of resistance against the potential advantages of strategic embrace of tougher rules.”