Deliveroo leaves Spain before the entry into force of the 'riders' law

British food delivery platform delivers goods out of Spain. The company announced on Friday that it intends to halt its activities in the country just days before the new riding technique takes effect. After failing to achieve the expected return, he believes that the feasibility of doing business in the country is difficult. The company claims to have 113 Spanish employees and works with about 3,800 riders and 9,000 restaurants in 70 cities.

The company, which he had recognised at the time of its March IPO that he could pull out of Spain due to regulatory risks, this morning issued a note informing it of its intention to stop consulting with its employees, affected riders and agencies about its operations in the country. It was only formalism before Spain stopped its activities, as the decision had been confirmed by various sources.

Delivery explained that it currently operates in 12 markets around the world, and the total transaction value (GTV) of most companies comes from the market where Delivery ranks first or second. In Spain, competing with glovo, uber eats and just eat, the company ranks third or fourth by city. Not enough to maintain profits.

The delivery platform, which involves Amazon, details that Spain accounted for less than 2% of deliveries in the first half of 2021. "The company concluded that achieving and maintaining a first-class market position in Spain requires a very high level of investment, and the potential return is very uncertain in the long run, which may affect the economic feasibility of the market for the company," the statement stated.

New law, a decisive factor

Although he did not mention the rider's law in his delivery note, the changes that would result in its operations appear to be decisive in multinational decision-making, as the department has consistently said the new regulations would raise the cost of delivery companies by hiring dealers directly or subcontracting cycling fleets to third parties. In fact, delivery companies have been negotiating deals with some last mile delivery companies, people familiar with the matter told this newspaper in May last year.

Spain is the only European country to reclassify riders by profession, the company explained. They point out that in Britain, there are no specific laws for these workers; It has been debated in Belgium and the Netherlands, but there is no legislation so far; In France, public consultations are under way to provide more protection for dealers, but no reclassification is contemplated, and in Italy, there is a rule that recognizes riders as self-employed.

"The proposal to terminate the Spanish business reflects the company's intention to focus investment and resources on other markets in which it operates, as consumer networks, restaurant and supermarket partners and riders grow, and to expand its market share in new cities and cities where it already does business," they stressed in the delivery service.

The delivery plan, created by William Shu in 2012, began collective consultations in early September and ensured cooperation with all stakeholders and the preparation of all necessary documents.

"If the company decides to terminate its business after the conclusion of the consultation process, the company will ensure that riders and employees have appropriate compensation schemes that comply with all regulations and local laws," he added.

Pressure from the union

Following the news, cc oo released a statement claiming the impact on the working conditions of those in the delivery service and that "in most cases, as a rider of fake self-employed persons", he faced "adequate safeguards recognizing their employment status, as noted in numerous labour inspection reports and judgments of Spanish courts".

The union, which has served as a worker consultant in the work performed at this company in 2020, has provided the affected employees with consultation, "which we understand as the mandatory consultation period (ere) of the collective redundancy process".

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La plataforma aclara que esta propuesta no afecta a las orientaciones para todo el año comunicadas anteriormente sobre el crecimiento anual del GTV del grupo y sobre el margen bruto de beneficio.

"The decision to consider stopping our operations in Spain was not taken lightly. We would like to thank all the restaurants that cooperated with Spanish delivery service and our respected customers. We are especially grateful to the thousands of excellent and always volunteer riders who have chosen to work alongside deliverymen, as well as our talented, dedicated staff. Everyone will be supported during the consultation, "said Hadi Moussa, chief commercial officer of International Freight Forwarders.

Spain's delivery business is unclear because the company has not filed an account with the business registry since 2016. In 2020, the group injected 5.1 million euros to fund its operations. The company suffered a serious setback last May when the Supreme Court confirmed its riders were fake self-employed and refused to appeal a case involving 532 Madrid dealers.

Competitors will fight for their business

The company's exit from Spain will benefit its rivals, who will seek market share to boost profit margins. The food supply sector has been given a boost during the pandemic, bringing food from restaurants to homes. Mr Shu admitted in March last year that the health crisis had greatly boosted the home food supply sector. "We have seen a strong start to 2021 and we are at the beginning of an exciting journey that is still in its infancy, a fast-growing and opportunity-filled home food delivery market." However, Spain's delivery tour looks set to end before the end of the year.

The delivery announcement comes two days after Glovo announced how it plans to comply with the new riding technique. The Spanish platform revealed Wednesday that it has abandoned subcontracted delivery fleets. Instead, it will hire 2,000 dealers directly by the end of the year and launch an "unprecedented" model of freelancers that will "meet" the standards set by regulations and courts.

As Diego Nouet, director of Glovo in Spain and Portugal, points out, this model will have new features to meet other people's standards and dependence on workers' status, and allow other applications and activities to be carried out at the same time "with complete flexibility, autonomy and independence".

While the company doesn't want to reveal all the new features this new model will include, yes, it has made some progress, such as free connection (autonomy will be able to decide the date and time of connecting to the platform), being able to set its own price and outsource order delivery, and riders being completely independent and free of penalty when choosing services. The model will remove the scoring system that Glovo uses to take precedence over others.

CC oo: Glovo disobeys the law

Despite Glovo's defense, cc oo today also expressed concern about the company's decision and asked the government to be "particularly involved" in the implementation and deployment of Royal Decree 9/2021 on May 11, known as riding tactics, "Revise workers' laws and regulations to protect the labor rights of those engaged in distribution in the field of digital platforms".

The union criticised the Spanish platform for "intending to break the law and continue to operate without guaranteeing work and therefore disrespecting the individual and collective rights of most of its distributors". Cc oo noted that Glovo's proposal "stands in stark contrast to the positioning of other operators in the industry that are compliant with Spanish labour laws and have economic benefits".

However, noue assured this newspaper that the new regulations do not require labor. "What it does is articulate the labor presumption in the delivery, which has ultimately been regulated by the workers' statute. And, as in any sector, the criteria of job externality and dependency determine whether an activity can be run by self-employed persons. " In this case, an iuris tantum presumption was established, the manager added, that it accepted evidence to the contrary.

Since uber eats Spain, they have yet to publish how they plan to comply with the law. They explained that they are "committed to being a long-term partner with Spain" and are working to adapt their home food business to the new regulations. Lo que sí remarcan es que confían en que "el Gobierno garantice que todos los operadores del sector cumplan con las mismas regulaciones y compitan en igualdad de condiciones".

Precarización y destrucción de empleo

Desde la Asociación Profesional de Riders Autónomos (APRA) y RepartidoresUnidors.org, han asegurado hoy que las predicciones que manifestaron estos meses atrás de "precarización y destrucción de empleo" ante la Ley Riders "se están cumpliendo a escasos días de que entre en vigor".

According to the two organisations, through ett, "proposals for around 15-20 hours a week for a month, maximum income of 400-500 euros and erratic contracts for riders are being merged. Dealers must provide their own vehicles and fuel ".

In addition, they warned that most dealers who agreed to sign labor contracts under these conditions have not renewed them, citing a drop in business demand in August.

The two associations said they planned a new mobilization of governments and unions supporting the new law, while also knowing that deliveries would stop doing business in Spain, "which would mean further job damage, both directly and indirectly." The two organisations continue to insist that the self-employment model is "the most flexible for the sector and probably the only one that can guarantee a certain degree of stability in the future of both in Spanish".