Description
Glovo (the Spanish unit of Delivery Hero) has announced that it will hire riders as full-time employees. This shift is intended to mitigate ongoing legal uncertainties and regulatory penalties previously faced by the company. The new model will be rolled out in more than 900 locations in Spain where Glovo operates, the company said, affecting about 15,000 riders, most of whom are currently self-employed.
The change comes after numerous accusations and legal actions directed at Glovo for violating workers' rights and engaging in unfair competitive practices.
Specific instances include:
- Fines by Spain's Labour Ministry and Inspection totalling 57 million euros in January 2023 and further sanctions in January 2024 for non-compliance with the 'rider' law implemented in August 2021.
- A current criminal investigation against Glovo, initiated by a prosecutor's complaint in July, focusing on alleged labour law violations.
- A 295 million euro lawsuit filed by Just Eat Spain against Glovo for unfair competition.
Glovo had appealed the fines in court but decided to change its employment model to avoid further legal costs.
The Spanish Labour Minister, Yolanda Diaz, welcomed the decision, stating that "No company, no matter how large it is, no matter how much power it has, no great technology can impose itself on democracy". In 2021, Díaz successfully championed the Riders Law that classified food delivery drivers as employees of the digital platforms they work for, as opposed to self-employed freelancers.
Delivery Hero, Glovo’s parent company, projects an impact of approximately €100 million on adjusted EBITDA for fiscal year 2025 due to the change. This led to a drop of approximately 10% in the share values. They also revised their provisions for potential liabilities from between €330 million and €550 million to between €440 million and €770 million.
Glovo operates in more than 20 countries, most of them in Europe.
- Keywords
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working conditions,
employment status
- Actors
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Platform
- Sector
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Transportation and storage
- Platforms
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Delivery Hero
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