Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314637 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17740
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Online food delivery platforms typically operate through a controversial business model that relies on subcontracting self-employed workers, known as riders. We quantify the labor-market effects of the Spanish Riders' Law in 2021 that established the presumption of dependent employment for riders using a search and matching model. Riders with heterogeneous preferences for leisure trade off work flexibility and easier employability as self-employed against enjoying higher wages as employees. Our main finding is that the reform led to a higher share of employees but failed to fully absorb the large flows of workers transiting out of self-employment and decreased riders' wages leading to welfare losses. However, complementing the reform with a payroll tax cut for platforms hiring employees preserves employment levels and increases riders' welfare.
Subjects: 
riders
food delivery platforms
self-employed
employees
JEL: 
J21
J60
Document Type: 
Working Paper

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