Delivery App Glovo agrees to Spain's Riders Law

Glovo, the Spanish delivery app owned by Germany’s Delivery Hero, has committed to comply with Spain’s Riders Law, which represents a substantial shift in its labor standards. The company said it will hire some 15,000 riders, the majority of whom were previously designated as self-employed contractors.

Compliance with Spain’s labor reforms.

In 2021, Spain passed a labor reform that classified gig economy workers, such as delivery app riders, as employees rather than independent contractors. Despite this, Glovo continued to operate with several riders working as subcontractors, attempting to skirt the legal obligation. However, the corporation has decided to follow the law, noting that it wants to “avoid further legal uncertainties.”

The cost of compliance

Glovo’s initiative to hire 15,000 couriers has financial ramifications. The corporation warned that this adjustment would reduce its earnings by €100 million. This change reflects the costs of hiring full-time personnel and complying with Spanish labor standards.

Legal Challenges and Fines

Glovo has received many fines for labor violations stemming from its failure to recognize riders as employees prior to the 2021 reform. Additionally, CEO Oscar Pierre is scheduled to appear in court this week for potential violations of the Riders Law. The corporation is also facing a €295 million lawsuit from competitor Just Eat due to competition issues.

Statement from the Spanish Labour Minister

Spanish labor minister Yolanda Díaz responded on Glovo’s shift, noting that the corporation previously operated illegally. She stressed that corporations could no longer avoid labor standards, underscoring the government’s commitment to protecting gig economy workers’ rights.

Influence on the Delivery App Market

Glovo’s action reflects a broader trend in the gig economy, in which delivery apps are under increasing pressure to provide better working conditions for their employees. As other delivery apps examine how Glovo responds to these restrictions, it may influence future industry developments, particularly in nations with similar labor reforms.
In conclusion, Glovo’s commitment to comply with Spain’s Riders Law is a watershed event for the company and the gig economy. By engaging thousands of couriers, Glovo is complying with labor standards while incurring financial costs.