Glovo, the food delivery app operating in Spain, recently announced a significant shift in its employment model, moving from a freelance-based approach to one that fully employs its delivery drivers. This change comes as a response to mounting pressure from the Spanish government for app-based delivery services to provide labor contracts. The decision, announced by Glovo’s parent company, Delivery Hero, aims to eliminate legal ambiguities and is expected to result in a substantial financial impact, estimating a hit of approximately 100 million euros ($105 million) to their earnings in 2025. Despite this transition, Glovo maintains that the freelance model offers greater flexibility for many riders wishing to join the delivery workforce.
The company operates in over 900 locations across Spain, and this transition will affect roughly 15,000 drivers who have been operating under the previous freelance model. Spain has taken a firm stand against such gig economy practices, with the government penalizing Glovo in 2022 and 2023 for labor law violations, specifically for failing to classify its drivers as employees. The government cited specific instances where Glovo was found to have engaged immigrant workers without proper documentation or work permits, spotlighting the need for stricter adherence to labor standards within the gig economy.
Yolanda Díaz, Spain’s Labor Minister, welcomed Glovo’s decision, emphasizing the principle that corporate power cannot supersede democratic processes. She stated, “No company, no matter how large it is or how much technology it has, can impose itself on democracy,” underlining the significance of recognizing the rights of workers in the gig economy. Her administration has been pivotal in the legislative movement towards including gig economy workers as employees, culminating in the 2021 implementation of the “Riders Law,” which ensured that delivery drivers are classified as employees of the platforms for which they work, thereby granting them additional rights and protections.
The broader implications of this shift extend beyond Glovo’s operations, showcasing a trend in the European labor market towards improving the conditions of gig workers. Various governments across Europe are re-evaluating how labor laws apply to gig economy workers, spurred by similar efforts to grant workers better rights and protections. The European Union itself has also been considering legislation that could standardize the treatment of gig workers across member states, aiming to enhance social protections in a rapidly changing labor landscape driven by technological advancement.
Glovo’s transition also sets a precedent for other gig economy companies operating in Spain and beyond. It illustrates that sustained advocacy and regulatory pressure can lead to meaningful changes in how labor relations are structured within the gig economy. The move is likely to influence other delivery platforms, such as Uber Eats and Deliveroo, prompting them to reassess their employment models in light of upcoming regulations and societal expectations around worker rights.
As the gig economy continues to evolve, the emphasis on fairness and regulation of labor practices may present challenges and opportunities for companies like Glovo. While the shift to an employment-based model seeks to align the company with legal frameworks and societal norms, it also highlights the importance of balancing flexibility for drivers with the need for protections and rights that come with formal employment. The coming years will likely see further developments in labor policies concerning gig economy workers, particularly as the European landscape responds to these changes and as companies adapt to the new legal realities.
