Just one day before its founder Óscar Pierre testifies before the court accused of a crime against workers’ rights, Glovo changes its business model in Spain.
The company’s parent company, Delivery Hero, announced this Monday that “the management of Glovo” has decided “to change from an autonomous model to a model based on employment for its delivery workers in Spain,” it indicates in a statement.
The objective, he justifies, is to “avoid more legal uncertainties that lead to an increase in contingencies”, given the judicial battle that lies ahead. “The change in operating model, limited to Glovo’s business in Spain, is expected to have an impact of approximately €100 million on adjusted Ebitda for fiscal year 2025.” That is, for your result before taxes. “Despite this impact, Glovo is expected to generate positive adjusted Ebitda in Spain in fiscal year 2025,” he clarifies but without giving a specific figure.
In that same statement, Delivery Hero breaks down how much it has saved to face the different processes it has open in Spain. Specifically, it assumes contingencies of between 440 and 770 million euros for the whole of 2024, when until now it had set a margin of between 330 and 550 million euros, as indicated in its results for the first half of the year.
This sum, he points out, covers the costs related to Social Security, as well as fines, tax claims and other charges until 2024 and related only to Glovo Spain.
However, it assures that it does not recognize the provisions as effective because it understands that “there is not sufficient basis” for reclassification decisions to be made, despite the fact that it has assumed that these contingencies are raised.
It also points out that, pending court decisions, Glovo will have to pay or offer guarantees to the bank for these sums, progressively in the coming years and that the first payment is expected in the second quarter of 2025.
267 million euros in income from regularization
The second vice president, Yolanda Díaz, has celebrated the victory, due to the change in Glovo. “The rules we make and who we govern for matter. I have said in my country and in the European presidency that a young man who traveled on a bicycle with a cell phone in his hand in any city in the world was not an entrepreneur. We have made regulations that provide for it,” he expressed in Brussels about the ‘rider law’, reports Irene Castro.
“We have achieved it. No large company can impose itself on democracy. Today democracy has won in our country,” added Díaz, who explained that 60,000 workers are going to be regularized. “It is the most important affiliative movement in the history of Spain carried out by the Ministry of Labor,” said Díaz, who has estimated the income from regularization at 267 million euros and around double that in penalties and interest.
Regarding the sanction procedures that are already open against Glovo, Díaz has said that “the weight of the law is going to fall on them.” “Legality prevails and all procedures are being processed,” he stressed.
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