Germany owned delivery hero and Spanish delivery platform Glovo, has announced a significant shift in its labor practices, by pledging to hire approximately 15,000 couriers who are currently classified as independent contractors. This move comes in response to providing legal and regulatory pressures surrounding labor rights in Spain. According to Reuters, the decision could cost the company an estimated €100 million in earnings.
Spain’s 2021 labor reform, known as the Riders Law, directs that gig workers for delivery platforms be classified as employees. Despite this, Glovo had previously bypassed compliance by relying on service providers, keeping the majority of its riders off payroll. The company now says it aims to “avoid further legal uncertainties” by fully aligning with the law.
TechMarge reports that Glovo’s non-compliance has already resulted in multiple fines for pre-2021 infractions, and CEO Oscar Pierre faces court proceedings this week over alleged breaches of the Riders Law. Moreover, Glovo is struggling with a €295 million lawsuit filed by rival delivery service Just Eat, acknowledging unfair competition practices.
Spanish labor minister Yolanda Díaz, commenting on the development via a post on X, remarked, “Companies were not used to being told ‘no.’ Glovo thought it could act outside the law.”
This decision marks a turning point for Glovo as it seeks to navigate a more regulated gig economy landscape while addressing the legal and financial challenges stemming from its past operations.
