| It's been a quiet start to 2022 in Europe's gig economy, but in the last day of 2021 Delivery Hero bought Glovo, Spain's largest food delivery company. The German multi-national, previously a minority shareholder, now has a controlling stake in Glovo of 83%, with co-founders Oscar Pierre and Sacha Michaud getting a massive pay-out from the sale, while still retaining management control. What is so attractive about Glovo? Delivery Hero CEO Niklas Östberg cited the fact that the delivery platform has the largest market share in 16 of the 25 countries it operates in "despite having entered several years later than their competitors". The Barcelona-headquartered company is certainly ruthless in trying to get to the top. It has lead resistance to the Spanish Government's "Riders Law", helping to organise an astroturf movement of riders against the Law before it was passed in Congress and refusing to comply with the new regulation after it was enacted. Fines by the Labour Inspectorate and regional courts are racking up (the latest in Zaragoza on Friday), but none of this brazen illegality appears to have put off Delivery Hero. The conglomerate, which is listed on the German Stock Exchange with a value of €25 billion, has acquired delivery firms all over the world since it launched in 2011, including PedidosYa in Latin America in 2014, E-Food in Greece in 2015, Foodpanda in Asia in 2016 and Zomato in India in 2019. Its two firms in Kuwait, Talabat and Carriage, were sued by the Kuwait Competition Protection Authority for refusing to pay millions in fines for monopolistic practices in relation to the restaurants they work with. So Delivery Hero have a track record with company's which break the rules and don't like to face the consequences. The big picture is the tendency towards monopolisation in the food delivery platform sector. Some have doubted that there is such a tendency, considering the proliferation of new food delivery firms which have emerged in recent years, but it's difficult to find any of these platforms turning a profit. They are all fuelled by a splurge of venture capital into food delivery in the context of the pandemic, and very few are likely to end up being sustainable over the long-term, as they eat through cash they haven't earned with huge advertising campaigns promoting rock-bottom prices for deliveries in order to rapidly increase market share. Glovo has still never turned a profit, despite a turnover of €800 million last year. The aim of the game is not sustainability, it is to become large enough quickly enough to be attractive to the big players, like Delivery Hero, for a buy-out. The tendency within platform capitalism in general towards monopolisation - because just as no consumer wants to use two Facebook's or two Google's, no consumer wants to use two food delivery apps either - are likely to reveal themselves more and more in coming years as the sector consolidates. Ben Wray, Gig Economy Project co-ordinator |
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Gig Economy news round-up |
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- STUART DELIVERY FLEE MEETING AFTER WORKERS TURN UP: The ongoing battle between Stuart Delivery and its unionised UK riders took a new twist this week, as workers turned up to protest at a "secret" meeting company executives had organised with a hand-picked group of riders to discuss the industrial unrest at the company. The protestors say Stuart Delivery management fleed out of the back of the building when IWGB-union members turned up, while the company claims the meeting was cancelled before the protest took place. It comes after the longest gig economy strike in UK history from 6-24 December over cuts to pay was postponed on Christmas Eve, with the workers vowing to restart action in the New Year if the company does not come to the negotiating table. Stuart Delivery is a sub-contractor of Just Eat, Europe's biggest food delivery company. Read more here.
- DRAFT MADRID LAW ANGERS TAXISTAS: A draft law by the regional government in Madrid proposed on 23 December with little time for debate has angered taxi drivers in the Spanish capital due to its liberalisation of rules for ridehail platforms. The draft law, which is expected to be passed with the support of the far-right Vox party, states that transport vehicles with a driver (VTCs) are a "leasing activity" with "consideration of discretionary public transport of passengers", whose prices, unlike the taxi, "will not be subject to authorised rates". Julio Sanz, president of the Madrid Professional Taxi Federation, said the draft law meant the Madrid government, led by the right-wing Popular Party, "fails to fulfil the promise that it transferred to the taxi sector after the 2019 mobilisations to not regulate VTCs". Read more here.
- DELIVEROO RIDERS COVERED BY COLLECTIVE AGREEMENT, DUTCH COURT FINDS: A Dutch appeal court has backed the FNV trade union's view that Deliveroo riders should be covered by the collective labour agreement on transport for goods. It comes just a few months after another Dutch court had found that riders are employees and not freelancers. The ruling means that Deliveroo riders can access rights such as a fixed hourly wage, allowances and holiday pay, and wages paid during waiting time, illness and days off. It "applies retroactively to all deliverers who work and have worked for Deliveroo," Willem Dijkhuizen, director of FNV Transport & Logistics, said, adding: "Deliverers can report to FNV to jointly claim an employment contract that includes a collective labor agreement." Read more here.
- VIGO COURT DECLARES 97 MORE GLOVO RIDERS AS EMPLOYEES: A court in the Galician region of the Spanish state is the latest to find that Glovo riders are employees, not self-employed, ruling on 30 December that the company must hire 97 riders in the Pontevedra province of Galicia. The campaign group RidersXDerechos pointed out after the Vigo court ruling that there is now over 65 court verdicts in Spain which have ruled that riders are employees, yet Glovo still refuses to hire 80% of its riders in the country. Read more here.
- CATALAN GOVT PARTNERS CLASH OVER GLOVO: Members of the Catalan coalition government have clashed over whether Glovo, Spain's largest food delivery company based in the Catalan capital, is operating a legitimate business model. Victória Alsina, minister of Foreign Action and member of the centre-right Junts Per Catalunya party, told a liberal think-tank organised event in November that Glovo "is the model we want". Roger Torrent, member of centre-left Esquerra Republicana and minister of Business and Labour in the Catalan Government, was asked questions in the Catalan Parliament about Alsina's remarks and said that the Catalan Labour Inspectorate was pursuing cases against the company over “illegal transfer, investigating subcontracting and the use of temporary work agencies, as well as other labour and occupational health and safety obligations”. Read more here.
- GORILLAS PARTNERS WITH 'JUMBO' IN NETHERLANDS: Super-fast delivery firm Gorillas has struck-up a partnership with supermarket giant 'Jumbo' in the Netherlands. The partnership will see Gorillas massively increase the range of food it offers, while Jumbo expect using the German food delivery firm will allow it to reach more urban centres and younger demographics, enhancing its capacity to compete with the market leader, 'Albert Heijn'. Partnerships between firms specialising in ultra-fast delivery and supermarkets are becoming more common across Europe. Read more here.
Have we missed important news on the gig economy in Europe this week? E-mail Ben at [email protected] to help us improve our news round-up. |
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