Just Eat Spain Sues Glovo for Unfair Competition Amid Labor Model Shift
Just Eat Spain has initiated legal action against Glovo in the commercial courts of Barcelona, seeking €295 million for what it claims are damages stemming from Glovo's use of false self-employed workers. The lawsuit, filed on November 29, highlights Just Eat's assertion that Glovo, originally founded in Barcelona and currently owned by the German firm Delivery Hero, has gained a significant competitive edge, reportedly saving over €645 million by allegedly misclassifying workers. This practice, Just Eat argues, not only violates labor regulations but also creates an uneven playing field, as the company adheres to legal guidelines by employing couriers and incurring higher operational costs.
In a significant response, Glovo announced it would transition its labor model in Spain — moving away from the self-employed worker status to offering formal employment contracts. This announcement comes as Glovo's co-founder, Oscar Pierre, is scheduled to testify before a judge concerning accusations of labor rights violations. Glovo faces mounting pressure, burdened with more than €200 million in fines related to labor inspections and failed monetary contributions, while its top executives are under judicial scrutiny.
Just Eat emphasized its position as a responsible employer, having over 2,500 employees and being the first delivery platform to establish a collective bargaining agreement with major labor unions in December 2021. The company's statement points out the legal precedents condemning Glovo's employment practices, claiming that these advantages obtained through illegal means disadvantage law-abiding competitors like Just Eat.
Meanwhile, Glovo frames its labor model adjustment as a commitment to Spain, its primary market. The company has communicated plans to engage in discussions with social partners to effectively guide this transition, which would impact operations across all 900 delivery-capable cities of its service.
This change in Glovo's employment structure is welcomed by Labor Minister Yolanda Díaz, who views it as a positive development against a backdrop of companies flouting labor laws. Díaz expressed her satisfaction, stating that no company should operate above the law, articulating a clear stance on equitable labor practices within the gig economy.
While specifics regarding the timeline for this new employment framework remain vague, Glovo has assured stakeholders that it does not anticipate alterations in the availability of delivery couriers or predicted delivery times. As the situation evolves, it underscores the ongoing tensions between labor regulations and the gig economy, spotlighting the necessity for companies to align their practices with legal and ethical standards.
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