On 12 August 2021, the government directed companies in the distribution sector to organize their operations through digital platforms. The move aimed to reorganize how deliveries are managed and to clarify rider employment rules. Nearly a year after implementing a landmark labor reform, Yolanda Díaz, the vice president and key reference for the delivery sector, urged Glovo to continue using a largely autonomous rider fleet while signaling that a future option could involve deploying workers directly, without relying on a fleet. The protection of workers under the new framework remained a focal concern for those challenging perceived rule violations.
For more than six months, the Department of Labor, employers and unions debated a law that sought to reconcile multiple judicial rulings, including a Supreme Court decision, which found that digital distribution platforms were supporting autonomous rider fleets in a way that resembled fraud. A content-page rule emerged from these discussions, stating that apps should hire deliverers as employees. This interpretation would apply broadly across the industry, with Glovo seen as an exception to the presumed employment status.
The company known as the unicorn in Barcelona’s Poblenou chose not to alter its model, keeping the majority of its fleet classified as self-employed. This stance allowed it to maintain a competitive edge over other players in the Spanish market. Deliveroo exited, while Uber Eats decided to explore a strategy similar to Glovo’s. Just Eat remained in negotiations about market dynamics. The challenge with the practice of treating workers as freelancers is that it limits the platform’s ability to deploy personnel as needed for distribution, an approach some critics say pays riders less and increases the company’s market share by leveraging flexible labor.
Industry leaders questioned whether Glovo should follow the same path as freelancers to compete on equal footing. Courtney Tims, the managing director of Uber Eats Spain, asked Yolanda Díaz whether joining the freelancer model would preserve competitive parity. A year earlier, Patrik Bergareche, managing director of Just Eat in Spain, spoke with journalists about the perceived damage to fair competition that had already occurred. These conversations were reported by media outlets at the time.
The reliance on freelancers is said to enable Glovo to employ more deliverers, including those who only work when orders come in. This practice has contributed to Glovo’s growing market share over the past year, even as regulatory actions loomed. The Labor Inspection indicated that sanctions could follow, though the agency had not publicly disclosed penalties for months. The possibility of prolonged legal battles and appeals could delay payments for some riders.
Meanwhile, the enforcement of the new labor framework has not kept the pace with Glovo’s expansion. Authorities in Catalonia have been active, with enforcement actions in Girona, Tarragona and Lleida leading to substantial penalties. By September, minutes from the Barcelona province highlighted potential sanctions exceeding tens of millions for the company, with similar actions anticipated in the Canary Islands. Repercussions for Glovo’s executives could include crimes related to workers’ rights, even as the company continues to rely on a freelance workforce for the moment.
Ghost supermarkets in crisis
The equestrian law, aimed at curbing international investment in the delivery sector, faced strong opposition from various camps. Last year, several firms established a presence in Spain to capture a share of the home delivery market, including the so‑called ghost supermarkets. These operations, often described as dark stores in English, load products at hidden warehouses scattered around cities and deploy riders to deliver purchases directly to consumers within minutes. Public access to these facilities is minimal, with workers handling packages away from consumer sight.
Getir, a Turkish-backed brand, Gorillas from Germany, Rocket from Ukraine, Dija from Britain and Gopuff from the United States all entered the Spanish market following the new law. However, profitability remained elusive for many, prompting some to cut back on plans for expansion while others ended operations. Getir reduced its workforce and scaled back growth; Gorillas closed a facility serving hundreds of workers and assessed exit options; Rocket and Dija sold their operations; Gopuff laid off workers to cease activities locally. After deflating the ghost store bubble, Glovo stood out as the main persistence in sustaining the local market and the availability of restaurant meals for home delivery.