European Union plan to improve conditions for the growing number of gig economy workers could mean millions more of them are classified as employees entitled to benefits, the latest setback for digital platforms that rely on independent contractors to deliver food and offer rides.

The draft rules outlined Thursday aim to clarify the labor status of people employed by app-based companies like ride-hailing service Uber and food delivery business Deliveroo and would add oversight for the algorithms they use to manage workers.

Gig economy workers and platforms have fallen between the cracks of existing employment legislation, and the measures being considered by the 27-nation bloc, which would take years to come into force, are aimed at clearing up those gray areas

App-based gig work platforms have boomed in the digital economy, especially during the COVID-19 pandemic when demand for food delivery services mushroomed. The apps provide short-term work for millions of people but their rampant growth also has upended traditional labor and business models, resulting in showdowns between companies and regulators worldwide. Gig work’s flexibility is a selling point for many, but workers also complain that they end up making less than minimum wage after their expenses are accounted for.

Under the E.U. rules, which still need approval by the European Parliament, a platform that meets at least two criteria will be deemed an “employer” and people working for that company will be reclassified as “workers” with the right to a minimum wage, paid vacation, unemployment and sickness benefits, pensions and other benefits.

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