Glovo announced this morning its intention to abandon the delivery model with freelance couriers. In a statement, the company ensures that it will negotiate with social agents to implement a delivery model with salaried workers, as established by a presumption of the Rider Law for the past three years.
A Glovo delivery person in Barcelona
Sources from the company assure this newspaper that the change will be implemented as soon as possible. “In a few weeks, the self-employed model will no longer be operational,” they indicate. The measure will affect at least 15,000 people who currently work as couriers for the platform in 900 cities throughout Spain. After denying it for years, Glovo now states that the delivery labor model will allow maintaining delivery times and the availability of couriers.
“Glovo's management has decided to switch from a freelance model to an employment-based model for its delivery riders in Spain to avoid further legal uncertainties that could lead to an increase in contingencies,” Delivery Hero, the German group that has owned Glovo since 2022, stated in a press release.
The decision has been celebrated by the Minister of Labor, Yolanda Díaz, who for years has been pursuing collaborative economy platforms. She promoted the Rider law in 2021 and later urged the Prosecutor's Office to prosecute entrepreneurs who fail to comply with labor regulations through the Penal Code.
Minister of Labor
Yolanda Diaz celebrates the decision: “no technological company can impose itself on democracy”
“No technology company can prevail over democracy. Finally, Glovo is going to regularize more than 60,000 delivery drivers in Spain,” she celebrated. According to the minister, this would represent “the most significant affiliation movement in the history of Spain carried out by a Labour inspection.” Within this figure of 60,000 delivery drivers, both current couriers and those who have worked for Glovo at any time since 2015 are included."
This offensive by the Spanish Government is precisely what has led Oscar Pierre, the co-founder of Glovo who introduced this delivery model in Spain in 2015 by copying the system of other competitors in the United States and the United Kingdom, to face trial. Tomorrow, Pierre will testify before a Barcelona investigating judge following a complaint from the Public Prosecutor's Office, which accuses him of violating workers' rights, a crime punishable by up to 6 years in prison. The CGT union has joined as a private prosecution.
Owner of Glovo
Delivery Hero estimates that the change will reduce gross profit by 100 million euros in 2025
This decision will have an impact on the company's operations. Delivery Hero detailed this morning that the model change will subtract 100 million euros from adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fiscal year 2025. Furthermore, the group will increase the general contingencies for the fiscal year 2024 to a range of 440-770 million, compared to the previously announced 330-550 million. This amount covers social security contributions, fines, VAT claims, and other charges for payments that cover the period until the end of 2024 for Glovo Spain. The company has multiple ongoing issues at both local and international levels for operating with a false self-employed model.
Workers' representatives view Glovo's announcement with skepticism. The RidersXDerechos association has called for “caution given the criminal record” and the coincidence of the announcement with the legal statement of its founder. “We urge not to celebrate anything until everyone is formally hired and impunity is put to an end,” they stated in a release. From the CC.OO. union, Franz Morales, responsible for proximity projects, has warned that “we don't know under what conditions the company aims to formalize employment.”
For now, Just Eat is the only platform that operates with salaried delivery drivers, with a fleet of 2,500. Uber Eats, the other major competitor, operates on a hybrid model, combining independent delivery drivers with fleets of subcontracted delivery drivers from third-party companies.
Just Eat sues Glovo for unfair competition and demands 295 million from them
Earlier today, competitor Just Eat announced that it has sued Glovo for unfair competition in the home food delivery market. In a statement, the Dutch group explained that on November 29th, they filed a lawsuit with the commercial courts of Barcelona seeking compensation of €295 million. The multinational believes that operating for years with a fleet of freelance delivery drivers has put them at an advantage over Just Eat, which operates with a fleet of salaried delivery drivers, a more costly model than that of freelancers. Just Eat estimates that Glovo has saved over €645 million by hiring false freelancers in recent years.
