Gig Economy Project – Uber Eats joins Glovo in abandoning Spain’s Rider’s Law on it’s 1 year anniversary

Uber Eats move back to a self-employed model puts the credibility of the Rider’s Law at risk

Picture by Franklin Heijnen

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A few days before the first anniversary of the ‘Rider’s Law’ entering into force in Spain, one of the biggest food delivery platforms has announced it is returning to a freelancer model of employment. 

Uber Eats said that it will follow in the footsteps of Glovo, Spain’s largest food delivery platform, which has continued to hire its riders on a self-employed basis despite the Rider’s Law explicitly establishing a legal presumption of employment in the sector. In an e-mail to its riders on Monday [8 August], the company said that they will be able to “make deliveries as a freelancer” again “after the summer”.

Uber Eats had initially responded to the Rider’s Law by hiring all of its riders through sub-contractors, a change which unions criticised as an illegal transfer of workers. In March, the general director of Uber Eats in Spain, Courtney Tims, wrote an open letter to Vice President and Minister for Labour Yolanda Díaz claiming that the company was struggling to find riders because they prefer to work self-employed for Glovo, which had ignored the law, leaving Uber Eats at a competitive disadvantage.

“We watch helplessly how the government has failed to enforce the Rider Law,” the letter added. “And how the disadvantaged situation of all the companies that do comply with it gets worse every day. Faced with this situation, we all ask ourselves the same question: Should we follow the example of Glovo and work with freelancers to be able to compete on equal terms?”

Now Uber Eats, which was caught up in the Uber Files scandal last month, has acted on that implied threat, stating that: “Given the evidence that the majority of delivery people in Spain want to work as self-employed, we are exploring a new model that allows them to do so while complying with current regulations. In any case, we will continue to offer the option of working with our collaborating fleets.”

Just like Glovo, Uber Eats is now claiming that its new freelancer model will have sufficient changes from the previous one as to be applicable with the Rider’s Law, with one source telling ‘El Diario’ that “the new model we are working on would give delivery drivers full control over their work, including the ability to set the price of their own fares.”

*The Labour Inspectorate has responded to Uber Eats’ move by announcing that they will use “all the elements” available against companies which are deemed to be acting illegally, and will be “relentless in complying with the law”. According to El Diario, this includes the possibility of clamping down on restaurants which make use of illegal distribution systems, a possibility that could potentially disrupt the relationship between platforms like Uber Eats and Glovo and restaurant chains.

Rider’s Law one year anniversary

The shift comes just a few days before the one year anniversary of the Rider’s Law entering into force on 12 August. The law was intended to regularise and improve the working conditions of food delivery workers and was backed by the two big Spanish unions CCOO and UGT as well as the Spanish employers’ association CEOE. However, it was criticised by campaign group RidersXDerechos which said the text gave too much room for platforms to offer their own interpretation of the law, meaning it would invariably “lead to another endless judicial struggle”.

It is understood that Spain’s Labour Inspectorate has opened a file in respect to Glovo’s continuation with a self-employed model, which – if found to be in breach of the ‘Stop Fake Autonomous Act’ – could lead to significant fines. Despite Glovo’s tweaked freelancer system, the legal consensus appears to be that they will be found to be in breach of the law. 

Adrián Todolí, PhD in Labour Law from the University of Valencia, has said: “The delivery drivers can make small or large variations in their day-to-day work, but the system remains subordinate to Glovo. The Supreme Court makes it very clear that it is not relevant whether the worker can choose their schedule or refuse orders. What is relevant is who owns the digital tool”.

There have been over 50 court cases in Spain, including at the Supreme Court, which have all found that riders are employees.

However, the government inspections can take years and any future fines must be balanced against the financial benefits to the company of continuing to use a fake self-employed model in the mean time. It has been reported that Glovo benefits from faster delivery times than the competition through being able to flood the streets with freelancer riders which it doesn’t have to pay for waiting time. Uber Eats and other competitors who are paying by the hour have fewer drivers on the streets, therefore delivery times have increased, and they also must pay for waiting time, increasing costs, leading to the company raising prices to compensate for this.

“[Glovo] enjoy a clear competitive advantage thanks to being in breach of the law,” a former director of a food delivery platform in Spain, speaking anonymously, told El Confidencial

Uber Eats will now join Glovo’s strategy, with Just Eat the other big food delivery company which, at least until now, remains committed to the Rider’s Law, having signed a historic collective bargaining agreement with Spanish unions CCOO and UGT in December. However, Just Eat is currently involved in a dispute with French union as it tries to lay off riders and return to a self-employed model in some parts of that country, so a shift in policy in Spain cannot be ruled out. Deliveroo exited the Spanish market last year following the introduction of the Rider’s Law.

Speaking to Basque newspaper Gara about the one year anniversary of the Rider’s Law before the latest news on Uber Eats, Carlos Gutiérrez, Secretary of Studies and Trade Union Formation of the CCOO, said: ”The assessment a year later is positive: it has allowed the rights of the workers to be ordered and regulated, although there is still a lot to go back.”

“We are on the way to equalize their rights but it is not easy”, UGT platform coordinator Rubén Ranz told the same newspaper.

*The information in this paragraph was added in after initial publication of the article

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