“Deliveroo is intending to consult with its employees over ending its operations in Spain,” the app-driven food delivery firm said in a statement just two weeks before a deadline for compliance with a key labour law reform.
In mid-May, Spain became the first country within the European Union to approve legislation that recognises delivery riders working for firms such as Deliveroo or UberEats as staff.
It is the first European legislation that explicitly regulates the status of delivery workers, who get around on bikes and motorcycles and whose numbers have exploded in recent years, despite precarious working conditions.
Under terms of the reform, companies must treat their riders as staff and pay contributions so they can receive social benefits, with firms given three months to comply. The deadline expires on August 12th.
Although the reform would have an effect, Deliveroo said it was “not the reason why it considered” leaving the Spanish market, which was for “purely economic reasons”, a company spokesman told AFP.
Deliveroo, he insisted, had “the financial capacity to take on the riders it works with” but had made clear from the start that the rider law was “not compatible with current market and working conditions”.
But the Riders X Rights union, which has been at the forefront of the struggle for riders’ rights, said it was clear the labour reform was behind the decision.
“The message is clear: if they have to comply with labour legislation it is not in their interest to continue operating here,” the union tweeted.
In Spain, as in other countries, the riders have repeatedly denounced their precarious working conditions, taking legal action to demand recognition as salaried staff, which would guarantee them benefits such as paid holidays and sick leave.
The legislative changes which were pushed through by the left-wing government of Prime Minister Pedro Sanchez came after a Supreme Court ruling last year that there was a “working relationship” between riders and Barcelona-based food delivery app Glovo.
Deliveroo operates in 12 markets around the world and said the vast majority of its gross transaction value (GVT) — or revenues — came from countries in which it ranked first or second.
But in the first half of 2021, Spain had only accounted for “less than 2.0 percent” of its global revenues.
“Achieving and maintaining a top-tier market position in Spain would require a very high level of investment with very uncertain potential long-term returns,” Deliveroo said.
Pulling out would allow the company to “focus investment and resources on the other markets”.
The company said it would begin consulting with both staff and riders in early September which would last around a month following which it would issue its final decision.
Earlier this year, Deliveroo, Stuart, Glovo and UberEats warned that such “forced labourisation… endangers a sector that contributes 700 million euros to Spain’s GDP”.