Digital food delivery firm Glovo has been slapped with a $78M fine for breaching labour laws relating to the hiring of riders in Spain.
Spanish authorities said that the company failed to contribute to social security and make other payments from 2018 to 2021.
“Glovo has violated fundamental labour rights and they have obstructed the work of the investigation. For this reason, action has been taken against this company,” Spanish Labor Minister Yolanda Diaz stated.
According to a local newspaper, the company had falsely classed over 10,000 riders as self-employed in the cities of Barcelona and Valencia, hence failing to recognize that they had an employment relationship with the company.
Glovo which is majority owned by German, food-delivery giant Delivery Hero has vowed to appeal the decision. “During the inspection period, Glovo asked to expand and provide its evidence, reflections and assessments as well as different documentation, which was rejected by the labour inspection,” a statement from the company said.
The penalty, local dailies report, is equivalent to more than 13% of Glovo’s revenue in 2021. In May 2021, Spain passed a law (aka Riders Law) requiring food delivery platforms to have form labour contracts with riders.
In response, the company said, “These inspections occurred prior to the introduction of Spain’s Riders’ Law, which is why Glovo intends to challenge the proposal and expects a judgment only in the coming years. Glovo remains fully committed to complying with Spanish labour regulations and the new Riders’ Law.”