Just Eat and Glovo are at the centre of a controversy that is putting the home delivery sector in Spain in jeopardyThe dispute arises after Just Eat filed a complaint against Glovo, alleging unfair competition practices due to the latter's prolonged use of delivery drivers under the guise of false self-employed workers. This conflict not only addresses economic issues, but also fuels the debate on labor rights on these types of platforms.
The lawsuit, filed on November 29 in the Commercial Courts of Barcelona, demands compensation of 295 million euros for damages. According to Just Eat, Glovo's strategy of using false self-employed workers would have allowed it to save more than 645 millones de euros in labor costs, giving it an unfair competitive advantage over competitors who have complied with current labor legislation.
Glovo's change of direction
The case took an unexpected turn when, just three days after the complaint, Glovo announced that it will abandon the false self-employed model and will start hiring its delivery drivers as regular employees. This move represents a radical change in the company's business model and applies to all the Spanish cities where it operates, more than 900, and to all the services offered through its platform.
Glovo's decision to adapt to a 100% labour model is not a coincidence. It comes one day before the appearance of its CEO, Óscar Pierre, in the Barcelona courts. Pierre is accused in a criminal case for alleged crimes against workers' rights, a matter that has generated great expectations in the legal and business spheres.
Just Eat and its position on the Rider Law
Since the Rider Law came into force in 2021, Just Eat has stood out for its strict compliance with the regulationsThe company not only adapted its business model to ensure that all its delivery drivers were hired as employees, but it also pioneered the signing of a collective agreement with the country's main unions. This effort to comply with the legislation has meant high operating costs for Just Eat, putting the company at a disadvantage compared to competitors who have continued to use models based on false self-employment.
In its statement after filing the lawsuit against Glovo, Just Eat said that “numerous rulings have condemned Glovo for hiring delivery drivers as false freelancers and violating labor law regulations.” According to the company, this model not only directly affects workers’ rights, but also negatively impacts competition in the sector.
Economic and legal repercussions for Glovo
Glovo's transition to a labor model is not without its challenges. The company, owned by German giant Delivery Hero, has accumulated fines and penalties related to its fake self-employment model that exceed 200 millones de eurosAccording to recent reports, Delivery Hero has provisioned up to 400 millones de euros to face possible fines and additional charges in Europe.
In addition, Glovo has assured that it will open a dialogue table with social stakeholders to guarantee a consensual labour transition process. This forum will be open not only to Glovo workers, but also to other operators in the sector who wish to adapt to current legislation.
On the other hand, this case has shone a spotlight on the lack of action by some platforms to comply with labour regulations. While rival companies such as Uber Eats opted for hybrid models and others, such as Deliveroo, left the Spanish market, Glovo continued to operate under a scheme that it must now abandon permanently.
The workers' perspective and the impact on the sector
The delivery workers' group, represented by unions and associations such as RidersxDerechos, has shown caution regarding Glovo's announcements. Although they welcome the change, they demand guarantees of transparency in the algorithms, the regularisation of migrant workers and respect for union rights. In addition, some groups have pointed out that this change comes too late and after years of job insecurity.
From the government, the Minister of Labor, Yolanda Díaz, has highlighted this change as a victory for labor rights in Spain., noting that “no company is above the law.” This change represents an important milestone in the implementation of the Rider Law, although it leaves questions about how it will affect the sector as a whole.
The controversy between Just Eat and Glovo illustrates the challenges of operating in a highly competitive market, while highlighting the need to reconcile technological innovation with respect for labour rights. Now, the focus will be on how both companies will manage the legal and operational implications of this confrontation, which will undoubtedly mark a before and after in the delivery sector in Spain.