Glovo Ends False Self-Employment After €205M Fines

Glovo Ends False Self-Employment After €205M Fines

Delivery platform Glovo has announced a "labor model change across Spain": its riders will no longer be self-employed but will be hired directly by the company. This decision trinc the accumulation of €205.3 million in fines imposed by regional courts since early 2023 for irregular work practices involving thousands of affiliated individuals. Three years after the approval of the Rider Law (Ley Rider), the company has decided to stop ignoring government demands.

What Changes for Riders: From "Work When You Want" to Scheduled Contracts

The shift has not been unanimously welcomed as a victory. Those who worked as freelancers describe an uncomfortable reality compared to the official narrative: schedule flexibility, the ability to accept or reject orders, and in some cases, income they considered sufficient. A rider from the Marbella area claims that working seven hours on a Sunday generated €100 gross, about €70 net after expenses, and that during peak season with their own motorcycle, monthly net earnings could exceed €2,500, a calculation disputed by another participant. Their central argument: the problem was not the model itself, but unfair competition from those operating with rented accounts.

Rented Accounts: The Hole No One Wanted to Look Into

The mechanism, detailed in discussions, works as trinc: a person with legal status registers as self-employed, opens a platform account, and rents it to someone without work permits in exchange for a percentage of billing, around 30%. The account holder controls the income and holds the power. They argue this system depressed workload volume and prices per order, explaining why many riders blame irregular competition rather than the company. With employment contracts and mandatory registration, this parallel market for licenses becomes theoretically much harder to sustain.

The Freelancer Calculation: €300 Minimum Costs and Unpaid Leave

The other side of the balance is the cost of being self-employed. The minimum social security contribution is around €300 per month, plus fuel, vehicle maintenance, and a total absence of basic rights: no paid vacation, no real sick leave coverage, and non-equivalent social security benefits. Defenders of the change argue that a true freelancer is not one who delivers for a single company under imposed conditions, but one who registers freely and invoices multiple clients. They argue the figure of the false self-employed is a recent invention to disguise a standard employment relationship and avoid paying contributions.

Just Eat Precedent and Unfair Competition Lawsuit

While Glovo pivoted, Just Eat Spain filed a lawsuit with Barcelona Commercial Courts claiming €295 million for unfair competition. The thesis: Glovo abusa labor laws for years, operating with lower costs than those who complied with the Rider Law from the start. The paradox is evident: the company now adapting to the law must defend itself against competitors who have complied for years and are now passing them the bill.

A Business That Doesn't Make Money Even with Cheap Riders

The economic backdrop is uncomfortable for everyone. Glovoapp23 SA, the entity consolidating group accounts, recorded losses of €178.8 million in 2023, according to data discussed, despite a 44% growth in gross merchandise value. Delivery Hero paid nearly €1 billion for the company in 2021 and has still not managed to pull it out of the red spiral. Given this landscape, the lingering question is whether the regulated labor model will make the business viable or simply accelerate adjustments.

The Exact Point Where Analysis Stalls

Positions do not converge. Some argue that employment contracts destroy an economic activity that was functioning and that the State takes a growing share of the margin while riders earn less. Others respond that if the business only balanced with false freelancers, the problem was not regulation but the model. And a third, more uncomfortable current points out that neither with nor without contracts do delivery accounting books close. Glovo's pivot is done. What remains unresolved is whether anyone actually wins.