“Those companies, they are called Glovo or whatever they are called, if they fail to comply with the legislation, the weight of the law and the Work inspectionas we have been doing.” This is how the second vice president responded last week, Yolanda Diaz, to the question that a deputy asked him in Congress. The pulse between the Minister of Labor and the home delivery company founded in Barcelona and recently bought by the German giant Delivery Hero has been going on for more than 10 months, when the ‘Rider law’ came into force and Glovo decided, unlike of the rest of the companies in the sector, to continue distributing through freelancers. But despite the vehemence that he publicly expressed last week in Congress, Díaz already knew at that time that he had a guarantee that Glovo would end up complying with the ‘Rider law’.
Last May 19 met the Board of Foreign Investments, a body made up of 16 representatives from different ministries, dependent on the Ministry of Industry and Commerce and in charge, among others, of preparing perceptive reports on sales of Spanish companies to foreign buyers. And this past May 19, said Board met to talk about Glovo and the operation that this company with its headquarters in Poblenou in Barcelona had made official a few minutes before the New Year’s Eve 2021: its sale to Delivery Hero, based in Berlin (Germany). What raised, in the eyes of the Germans, the valuation of the firm to €2.3 billion.
“The transaction is expected to close in the second half of 2022, subject to obtaining the approval of the regulatory authorities & rdquor ;, read the statement through which the Germans announced the purchase. And in those Yolanda Díaz arrived. The Board of Investments has the capacity to veto operations of this type, for the sake of a 1999 law and temporarily reformulated during the pandemic to prevent foreign capital from buying strategic companies taking advantage of the fact that their price or assets had plummeted.
The Ministry of Labor made a formal request to the Board of Foreign Investments in order to paralyze the sale of Glovo until it obtained guarantees from the Germans that they would abide by the ‘Rider law’, in order to put an end to what the rest of the delivery actors have seen as a direct challenge to one of Diaz’s star laws. “Delivery Hero has formalized in writing a responsible statement that will defend compliance with the Rider Law from his position as a Glovo shareholder,” government sources explain. These same sources add that the operation was approved in the Minister council of may 31. Glovo, when asked by EL PERIÓDICO, has declined to make any statements in this regard.
The whole sector waiting
Work urgently needs to put an end to its pulse with Glovo almost as much as it could end up being expensive for the company. She is now controlled in almost 80% of its shareholding by Delivery Hero. Well, Glovo’s rivals -mainly JustEat Y Uber Eats-, who did modify their work models to adapt to the regulations, have been pressuring Díaz in recent months to do so. Since given the lower labor costs involved in operating with freelancers and the greater ability to attract more ‘riders’, the firm with the yellow backpacks has been gaining market share these months at the expense of its competitors. “Should we follow the example of Glovo and work with freelancers to be able to compete on equal terms?” The general director of Uber Eats in Spain, Courtney Tims, asked the second vice president two months ago.
Related news
Delivery Hero’s written commitment held by Labor does not exempt the new German managers from the millionaire fines that may fall on the company in the coming months. Well the Work inspection has a macro operation underway in several cities in Spain where it is collecting information on current Glovo labor practices. In order to be able to certify if their distributors continue to operate as fake self-employedas already ruled by supreme court in 2020. And as each and every one of the inspections that have been resolved throughout the state since Glovo has been operating in Spain has ruled.
The final amount that Social Security may end up claiming from the delivery company for unpaid contributions in recent years may be in the tens of millions, taking into account the size of its current fleet of delivery men, which is much higher than that of that he had during his early years. Since it began its operations and until December 2021, Glovo has been forced to register as employees 11,358 delivery men who had operated as false self-employed. What it was worth to accumulate a debt of €16.2 millionwhich could now be multiplied after the new Inspection failures.