In a landmark decision that could reshape the gig economy, Glovo, the Spanish food delivery app, announced a major shift in its employment model, moving its delivery drivers from freelancers to full-time employees. This decision stemmed from ongoing pressure from the Spanish government, which has been advocating for drivers to have proper labor contracts to ensure they receive full employment benefits. Glovo’s parent company, Delivery Hero, highlighted that this move aims to avoid potential legal issues, with a projected financial impact of 100 million euros in 2025.
This transition represents a significant step in labor law enforcement within the gig economy, particularly following Spain’s past penalties imposed on Glovo for violating labor laws. The company faced fines for failing to properly classify its drivers as employees and hiring immigrants without proper documentation. Labor Minister Yolanda Díaz praised the new employment model, reinforcing that no company should override democratic principles. Díaz had previously championed the “Riders Law” in 2021, which reclassified food delivery riders as employees rather than freelancers.
The broader implication of Glovo’s decision is reflective of a growing trend towards ensuring gig economy workers receive traditional employment benefits. As the food delivery giant operates in more than 20 countries, predominantly in Europe, this shift may set a precedent for similar companies around the world. The importance of labor rights and fair employment practices is increasingly becoming a focal point of government policies in the digital and gig economy sectors.
As Glovo navigates these changes, the industry’s attention will be keenly focused on how this new employment model impacts the company’s operations and financial health. While the financial burden of transitioning to an employment-based model is significant, the legal and regulatory benefits are expected to outweigh these costs in the long run. The move also raises questions about the future employment models of other gig economy companies and whether they will follow suit to avoid similar legal pressures.