Posted: 3:55 AM PST · December 3, 2024
Glovo, a Spanish delivery app owned by Germany’s Delivery Hero, has bowed to pressure over labor rights in its home market.
Glovo has announced that it will hire around 15,000 riders — most of whom are currently ‘self-employed’ according to the company. This move comes after the company faced multiple fines for labor infractions predating the 2021 Spanish labor reform, which recognized riders gigging for delivery platforms as employees.
A 2021 Spanish Labor Reform: Recognizing Riders as Employees
The 2021 Spanish labor reform was a significant step towards improving labor rights in the country. The reform recognized riders who work for delivery platforms as employees, rather than independent contractors. However, Glovo and other companies have continued to operate with most riders off their books, using subcontractors to avoid the requirement.
Glovo’s Attempt to Swerve Labor Requirements
Glovo has been accused of attempting to swerve labor requirements by treating its riders as subcontractors, rather than employees. This move was seen as an attempt to avoid paying benefits and following labor laws.
CEO Oscar Pierre Due in Court Over Alleged Breaches
The CEO and co-founder of Glovo, Oscar Pierre, is due in court this week over alleged breaches of the 2021 riders’ law. This development has added to the pressure on the company to change its approach to labor rights.
Competition Lawsuit from Just Eat
Glovo is also facing a competition lawsuit from competitor Just Eat, which is seeking €295 million in damages. The lawsuit alleges that Glovo engaged in anti-competitive practices and abused its dominant market position.
Spanish Labor Minister: Companies Were Not Used to Being Told No
In an interview with TechCrunch, Spanish labor minister Yolanda Díaz said: "Companies were not used to [being] told no. Glovo thought it could act outside the law."
What This Means for Glovo and Its Riders
The decision by Glovo to hire thousands of couriers marks a significant shift in the company’s approach to labor rights. The move is seen as an attempt by the company to avoid further legal uncertainties and fines.
Impact on the Industry
This development has significant implications for the delivery app industry as a whole. Other companies may be forced to follow suit and recognize their riders as employees, rather than independent contractors.
Glovo’s €100 Million Hit to Earnings
The decision by Glovo to hire thousands of couriers is expected to result in a €100 million hit to earnings. This is a significant blow to the company, which has been under pressure from regulators and competitors.
Conclusion
Glovo’s decision to hire thousands of couriers marks a significant shift in the company’s approach to labor rights. The move is seen as an attempt by the company to avoid further legal uncertainties and fines. Other companies in the delivery app industry may be forced to follow suit, leading to significant changes in the way riders are treated.
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