Delivery Hero says Glovo riders in Spain to become employees

A Glovo employee in Palma. | JAUME MOREY

Paolo Laudani & MDB DigitalMadrid02/12/2024 09:29

Delivery Hero said on Monday that freelance riders at its Glovo unit in Spain will be hired as employees. "Glovo management decided to change from a freelance model to an employment based model for its delivery riders in Spain to avoid further legal uncertainties leading to an increase of contingencies," the company said in a statement.

The German delivery company said the move would dent its 2025 adjusted earnings before interest, taxes, depreciation, and amortization (adj. EBITDA) by 100 million euros ($105.09 million). It also confirmed its 2024 guidance.

Spain fined Glovo 79 million euros in 2022 for failing to contribute to social security and make other payments from 2018 to 2021 as it did not hire its delivery riders under formal contracts.

In January 2023 the country's Labour Ministry fined the delivery service a further 56.7 million euros for similar reasons, a source told Reuters.

In May 2021, Spain passed one of Europe's first laws relating to gig-economy workers' rights, requiring riders for food delivery platforms be made employees on formal labour contracts. This came into effect in August that year. The labour ministry said that Glovo had refused to give labour contracts to more than 10,600 riders in Spain's second and third-largest cities, Barcelona and Valencia, since the riders law came into effect.