Part 1: When the pilot brings the Coke
Online orders for clothes, cheese and other products have already been a big hit before Covid-19. During the lockdown even the last customer got a taste for pick-up and delivery services. In order to support regional suppliers, not only goods from the food sector were purchased, but also from local textile dealers. Since the economy started to pick up again, short haul trips in particular are experiencing a strong boom.
In the following, we would therefore like to outline the advantages that independent courier drivers offer for all parties involved and the possible ways of organising this.
Typically, courier drivers are either employed by companies or receive orders as self-employed persons. It is particularly important here to make a distinction between salaried employees and freelancers. The procedure for classification according to Section 7a(1) of the German Social Code, Book IV (Sozialgesetzbuch IV, SGB IV) available for this purpose might be useful, but it takes too much time. In view of the complex Section 12 of the German Act on part-time work and fixed-term employment contracts (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge, TzBfG) , the possibility of working on call (Arbeit auf Abruf) quickly reaches its limits when it comes to spontaneous work on call or standing in for a delivery trip.
Supply and demand of courier services - regardless of the contractual basis on which the courier driver provides his services - are often managed via platforms or apps that only appear as intermediaries and do not want to take on any obligations - and certainly no employment contract-related obligations.
Companies do more than often rely on the independence of their courier drivers. The advantages for independent courier drivers are obvious. Work becomes very flexible regardless of the chosen contractual model and access to the labour market is fairly easy. It is possible to hire drivers and to perform or settle the order in a rather fast and anonymous process, in some cases even without an application procedure. Unlike an employee, the drivers may also appoint sub-contractors. They may also refuse individual trips or let other people do the job on their behalf and the amount of their income lies in their own hands. They may also work for a number of different companies.
For companies hiring an independent driver this is worthwhile because they - processed via the platform - only have to pay per gig/trip/delivery, changes in conditions are controlled via the app; work equipment (bicycle, mobile phone) often has to be procured and maintained by the self-employed person and employee rights, such as minimum wage, holidays, continued payment of wages in the event of illness, social security contributions, etc. do not apply. Unlike employees, self-employed courier drivers are allowed to work on Sundays without violating the German Working Time Act (Arbeitszeitgesetz, ArbZG).
It is therefore perfectly understandable that companies would rather use self-employed courier drivers to deliver their goods to the customer. They should pay particular attention to the following, especially on the last mile:
When it comes to beverage delivery services, which are currently in greater demand than ever before, it can be observed that fixed route planning with loading options "at every corner" and specific delivery time windows is a very profitable model. Here, almost everything is done to provide the customer with refreshments as quickly as possible via digital lean administrative processes from placing the order to payment. This could be a model for many dealers. If a client wants to use courier drivers who are not supposed to be employees, some skill is required both in the drafting of the contract and in its actual implementation in order to take advantage of the entrepreneurial advantages of the independence of the drivers and to avoid the risk of the drivers turning into employees. Starting points for this would be, for example, to let the courier driver control when and where he picks up the goods and also to agree the exact delivery date with the customer himself, so that the driver ultimately acts at the customer's instructions, while everything is controlled purely digitally.
If well designed, the advantages that self-employment brings to those involved can be realised in certain areas. Finally, the German Federal Social Court also recognised the independence of freelance pilots, whereby the means of transport was not the decisive factor in the dispute. As with almost all legal issues, the matter has to be assessed on a case by case basis. But it lies in the hands of the parties to shape their contractual relationship.
Luther Rechtsanwaltsgesellschaft will continue to explore the issue of the last mile in a series of webinars starting in autumn 2020, and will also take a closer look at further developments and future adjustment requirements from various areas of law. You definitely won’t want to miss it!. More