Glovo transitions drivers to full-time employees amid legal pressures

In Spain, waves of pressure from the government have transformed the employment landscape for food delivery drivers. Glovo, a prominent food delivery app operating in over 20 countries, announced a significant shift by transitioning its drivers from a freelance model to being classified as full-time employees. This decision was catalyzed by increasing scrutiny from the Spanish labor ministry, which had imposed fines on Glovo in 2022 and 2023 for violating labor laws, specifically for failing to properly contract its drivers and for issues related to the employment of undocumented immigrants. The changes came after Spain’s Labor Minister Yolanda Díaz advocate for the 'Riders Law' in 2021, establishing that food delivery workers should be treated as employees of their respective digital platforms rather than self-employed contractors. The legislation was part of broader efforts to regulate the gig economy, aiming to ensure that workers receive fair compensation and rights associated with traditional employment. Glovo's parent company, Delivery Hero, acknowledged that the switch would result in a significant financial impact, estimating a €100 million ($105 million) hit to earnings by 2025. While this move aligns Glovo with labor regulations and mitigates legal uncertainties, it also indicates a shift in strategy reflecting a broader trend among gig economy companies in response to regulatory pressures. In her remarks supporting this transition, Minister Yolanda Díaz emphasized that no corporation, regardless of its size or influence, can supersede democratic processes regarding labor rights. The decision marks a pivotal moment not only for Glovo and its drivers but also highlights an ongoing evolution in the gig economy, as traditional labor models increasingly adapt to the demands of modern work arrangements.