Glovo faces a €79 million penalty tied to the alleged use of fake self-employed workers to staff more than 10,600 distributors across Barcelona and Valencia. This stands as the largest sanction ever handed down by the Labor Inspectorate against the Catalan-founded delivery platform, now part of the German group Delivery Hero. The so-called business policing file argues that Glovo’s organizational model facilitates irregular payroll practices, aiming to record payments in Social Security while the delivery workers’ conditions come under strain. The two cited operations in Barcelona and Valencia are the clearest examples of a broader investigation stretching across Spain, with early activity noted in Girona, Lleida, and Tarragona.
In Barcelona, authorities verified 8,331 riders and pursued a claim of €63.2 million in sanctions and unpaid dues; in Valencia, 2,283 riders were audited, with a demand of €15.75 million. Information from people familiar with the case indicates additional penalties were levied on individuals who obstructed inspections, including fines around €2,500. The enforcement activity marks a pattern of alleged obstruction that has appeared repeatedly, with some years already involving costs saved by the company through such blocks.
Since its inception in 2014, Glovo has challenged judges and labor inspectors who contend that delivery workers should be salaried employees rather than self-employed contractors. Despite fines totaling more than €20 million to date, and in light of new regulations introduced in August 2021 that define deliverers clearly, Glovo’s fleet remains substantial. Industry sources estimate around 16,000 active riders, with roughly 2,000 primarily in the supermarket sector and formally engaged employees.
Yet the balance between labor authorities and Glovo continues to tilt in favor of the inspectors. The latest penalties in Barcelona and Valencia apply to periods before the implementation of the new rules, and there remains the possibility of appeals. Despite ongoing disputes, the company continues to operate with freelancers, potentially delaying final settlements as cases proceed through the courts. A sizable portion of riders involved in these actions has slowed the closure of proceedings. “We will persist in engaging with the Labor Department; they must comply with the law”, stated a senior official in Congress, underscoring the political dimension of the issue.
unfair competition
So far, Glovo has absorbed the cost of contesting judicial decisions while continuing to rely on a base of freelance workers to protect and expand its market presence. Employing freelancers allows Glovo to scale its delivery fleets rapidly by paying only for services rendered and avoiding responsibilities tied to non-working periods, while also not bearing costs for vacations or sick leave when work stops. A larger fleet translates into more orders and quicker service, but at the potential expense of riders’ conditions and benefits.
This approach has given Glovo an advantage over rivals like Uber Eats and Just Eat, which initially complied with the law but later faced questions about workforce classifications. After observing the consequences, some competitors reconsidered their stance and moved toward balancing compliance with market needs, which has reshaped competitive dynamics across the sector.