đ´ââď¸ This Week in Spain: Glovo Abandons Freelance Model
Also: The rainbow flag is in the news again and an anti-abortion summit raises eyebrows.
By @IanMount and @AdrianBono | December 5, 2024 | Madrid | Issue #81
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đĽ This Week in a Nutshell: We thought it was time to take a break from politics (or at least from leading with it) so weâre telling you all about Glovo and its decision to go from a freelance to an employee-based model for its delivery riders. How will this affect your next order of a cheeseburger from Five Guys at 3 a.m.? Read on to find out!
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Easy, rider
Glovo admits that riders who work for it actually work for it
Famed business writer Michael Lewis published an article in Vanity Fair back in 2011 called âItâs the Economy, Dummkopf!â, in which he wrote, âGermans longed to be near the shit, but not in it. This, as it turns out, was an excellent description of their role in the current financial crisis.â Now, his take on Germans has been called âa flopâ, âlazyâ, and âcompletely ridiculous,â but thatâs not important.
What is important? Well, the article explains (sorta) why this week weâre turning our focus from the (wait for it) shitshow that is Spanish politics and focusing on a Spanish business that was bought by a German business (which probably wishes it hadnât) and is now involved in its own (waitâŚ) shitshow.
Weâre talking about Glovo. Youâve seen their employees riding around on bicycles or scooters with giant yellow cube food delivery backpacks. Well, thatâs the thing: they arenât employees. Or they werenât until Glovo announced Monday that it would mystically turn them into employees after years of trying to avoid it. And thatâs a long story about the collision of job quality, cheap immigrant labor and Spanish laws.
2015. Thatâs the year Glovo was founded in Barcelona, a boom time for delivery startups. The idea was simpleâUber for stuff, basically. The deliverersâknown as ridersâwould have an app on their phone that they would turn on when they wanted to make money doing a few deliveries. Times were tougher back in 2015 so even though deliveries donât pay muchâŚeverybodyâs happy, right?
That didnât last long. By 2018, riders were complainingâand not just about Glovo. The problem? Employment law (generally) says that if you only have one client and/or that client tells you where or when you have to work, youâre an employee, not a freelancer. And as with many app/algorithm gigs around the world, riders felt that they were punished if they didnât work at high-demand times, or didnât take every delivery assigned. They felt like employees. But without benefits.
And they began to sue. A rider in Madrid named Isaac Cuende filed suit against Glovo, saying âI started to feel like I had no freedom. Even though I had no working relationship with them and was just a freelancer, I had to work when and how they said.â Cuende lost (twice) but another rider, VĂctor SĂĄnchez of Deliveroo won, with a Valencia court ruling he was an employee.
2019 was a tough year. Glovo lost its first case, in Asturias, and Deliveroo was smacked with a ruling that recognized 537 riders as employees. And then in 2020 the Supreme Court stepped in and said riders were employeesâwith Cuende as plaintiff.
The Ley Rider. The Spanish government joined the drama in 2021, when it passed the so-called Ley Rider to articulate the Supreme Courtâs doctrine as law. You woulda thunk that delivery services would get the hint. And some did. Deliveroo, ââGetir and Gorillas left the Spanish market. But three stayed: Just Eat and Uber Eats (which either hired riders or outsourced the work to delivery services) and Glovoâwhich according to CEO Oscar Pierre, modified the model in 2021, although left the riders as freelancers.
The problem? Over the years Glovo had already been hit with millions in administrative fines and claims for unpaid social security contributions. In social security alone the state says Glovo owes âŹ267m.
Still, those were boom times. Remember 2021 and 2022? COVID was bad for most people, but boom times for food delivery. Thatâs when Delivery Heroâthe German company we talked about aboveâswooped in to buy Glovo at a valuation of âŹ2.3bn (no, it didnât pay that muchâit bought 39.4% to add to the 43.8% stake it had already).
We were kidding! That brings us to now. To Monday, actually, when Glovo announced that after all the fights and the fines and all that thinking, it realized that it wanted to make all its drivers employees. Labor Minister Yolanda DĂaz was thrilled (being she was behind the Ley Rider and all, saying that 60,000 workers past and present would get some benefit, and the event would be, âthe most important worker affiliation movement in the history of Spain.â
This was kind of a hard pill to swallow for Delivery Hero, which said Monday the choice meant that the move would cost it âŹ100m in earnings for 2025, and force it to raise the amount it might need for possible fines and social security and stuff from the âŹ330-550m range up to âŹ440-770m. Man, those fines pile up! Just as theyâre dealing with possible EU fines for forming a possible cartel with Glovo before 2022 (!). Oh, and also a bummer? Delivery Heroâs stock price fell 10% Monday on the Glovo employee news.
Icing on cake. Just Eat announced on Monday that it had filed a lawsuit in Barcelona against Glovo demanding âŹ295m in damages for unfair competition over the years because, you know, they were paying employees with benefits and Glovo wasnât. Just Eat says Glovo saved some âŹ645m with its cheaper setup, which âpermitted Glovo to gain a significant competitive advantage.â Ya think?
This has NOTHING to do with it. Glovo cofounder/CEO Oscar Pierre testified on Tuesday in a lawsuit filed by prosecutors over workersâ rights at Glovo, but he said that while the change in employee classification could look like a âdefense strategyâ, it was really just a âcoincidence.â đ¤ŁNothing to see here!
Whatâs next? Glovo riders already report getting emails that they will be employees, while a suspicious rider group suggests they âkeep their eyes open.â One rider interviewed by El EspaĂąol prefers the Wild West, however. Horacio GĂłmez tells the paper that as an employee heâd only earn âŹ1,200, but working 10-12 hours a day on his own, he can bring âŹ4,000ââ more than an MP.â
More news below. đđ
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đŹ Five things to discuss at dinner parties this week
1. đłď¸âđ Supreme Court says displaying LGBTQ+ flag in public buildings is totally legal
This week the Supreme Court settled an argument that had been at the center of contentious debate in the last few years: is it OK (and legal) to display the rainbow flag outside a public building in Spain? It turns out, it is! (For now)
The Court has upheld the display of the flag, which it says is all cool and dandy because âitâs not a partisan symbolâ and it does not promote âany type of confrontationâ.
This landmark decision is in response to two appeals led by the Christian Lawyers Association, which questioned the legality of displaying the flag during Pride, arguing that it violated a law from 1981 that regulates the use of the Spanish flag and other official flags and symbols. One was on the main balcony of the Zaragoza City Hall and the other in the courtyard of the Valladolid Provincial Council.
In the ruling, four majority justices concluded that because the flag is only displayed during Pride Months or Marches, it is temporary and does not contradict the requirement for objectivity in public administration or âcompromise their neutralityâ.
In fact, the Court says, âit advocates for equality among individuals, a value recognized by the Constitution and the Charter of Fundamental Rights of the European Union.â
How did we get here? Considering Spain is one of the most LGBT-friendly countries in the world, this is kind of bizarre.
The case started moving up in the courts first at a regional level. In 2022, the AragĂłn High Court of Justice said displaying the flag in Zaragoza was legal, while the Castilla y LeĂłn High Court of Justice sided with the Christian association in Valladolid.
The Supreme Court has now endorsed the case in Zaragoza and overturned the one in Valladolid, unifying the legal criteria.
Itâs not over âtil itâs over. The Christian Lawyers Foundation is not happy with the ruling and has warned that it will appeal the decision to the Constitutional Court.
They said this was a ânecessary preliminary stepâ before taking the case to the European Court of Human Rights in Strasbourg.
They also said this was âanother example of the politicization of the Judiciaryâ and showed how PM SĂĄnchez has undermined judicial independence.
Sad face though. Despite the ruling, do not expect the LGBT flag to fly high in Valladolid anytime soon. The mayor of Valladolid, JesĂşs Julio Carnero (from the center-right PP) has said the flag will not be displayed ânot this year, nor the next⌠not while Iâm mayor.â
He definitely wonât be invited to Pride this year.
2.đď¸ Spain goes full Big Brother (tourist edition)
New travel rules from Spainâs interior ministry has tourism agencies and the media tied up in knots, because of how much info tourist services are going to have to collect and send to the interior ministry (aka the police). So much data! Which is why basically every article about the new rules referenced Big Brother (in English) and Gran Hermano (in Spanish). (We, as you can tell, are not breaking that tradition!)
So whatâs the deal? Like, why does Hertz need to report my birthday to The Man?
The new rules. The legal decree passed in 2021âbut delayed until now to give hosts and agencies time to adaptâis meant to update tourism housing rental rules (from 1959) and car rental rules (from 1974). The big goal? Boost security and the âfight against terrorism and organized crimeâ, according to the interior ministry. Okay. Modernization. Anti-crime. Good so farâŚ
All your data are belong to us (meme alert)! The new rules require lodging sites and car rental agencies to collect dozens of pieces of info (see the ANEXOS here for which ones), upload them to an application called SES.HOSPEDAJES, and retain the info for three years. Now this is getting more uncomfortableâŚ
Specifically, this data. Some of the star data points in the new requirements are ID number, payment methodâwhich can be the travelerâs bank accountâand the relationship between travelers. Now our buzzer is going offâŚ
Travelers, hosts and agencies think the worst. Lodging and car agency reps immediately complained that it would be âimpossibleâ to collect the amount of issue required and that the fines for not doing soâa possible âŹ30,000âwere exorbitant.
Then there was the Big Brother thing. The interior ministry tried to calm nerves by saying the relationship data was to stop child trafficking (a noble pursuit, obvs) and the payment data was to catch criminals, but lots of folks werenât buying it.
We have questions. People wanted to know whether a campsite that was supposed to keep your bank account info for three years really had that kind of security. And the relationship thing, wouldnât reporting that let the government track non-married couples, people having affairs, and justâŚanyone who wants their private life private?
Spainâs CEHAT hotel lobby speaketh. âIt's like 'Big Brother'âit's nuts and will cause chaos,â said CEHAT boss Ramon Estalella, using the official metaphor of this story. âRequesting this data, transmitting this data, storing it for three years, we believe it is a huge risk for all intents and purposes, especially for the protection of personal data,â he added.
Challenges. Requiring the transmission of so much data to policeâand for it to be held by establishments not exactly known for data securityâwill inevitably lead to challenges on data privacy grounds. Which means that Spain will probably lose an EU case on the subject in, like, six years.
For now, the rules remain. To be honest, it is not that much more info than travelers give now. And despite what the U.K. press saysâthe Sun quotes one (nameless) tourist saying, âI am sure another country will be happy to take my money" and also notes with horror that âalcohol limits are in place on destinations such as Magaluf and Ibiza.ââpeople will keep coming.
Still, as Spain gets 12.8% of GDP from tourism, probably best not to piss them off, right?
3. â¤ď¸â𩹠Health Ministry says organ donation between people with HIV will now be allowed
Did you know that Spain is the number one country in the world when it comes to organ donation? Well, things here are about to get even better.
It was a long time coming but the Health Ministry has finally started the process of allowing organ donation between HIV-positive people. Minister MĂłnica GarcĂa made the announcement at a World AIDS Day event, explaining that her department would repeal a regulation from 1987 that banned it.
GarcĂa stressed that this type of transplant is âsafeâ and also said the regulation currently in place is âobsoleteâ and âlacks legal foundationâ. The Ministry has opened a public consultation process to repeal the regulation that imposed this restriction, which will remain open until Dec. 16.
Repealing this regulation will mean the end of a long-standing demand by the patient community to combat the stigma associated with the disease.
As the World Transplant Organization (ONT) explains 65 individuals with HIV could have donated their organs in the last 10 years, which could have resulted in 165 transplants if the restriction had not been in place.
On top of that, around 50 HIV-positive patients are added to Spainâs transplant waiting list annually.
These sorts of transplants were deemed âhigh-riskâ during the 80s and 90s. However, this was debunked in the early 2000s with the arrival of antiretroviral therapy.
With current treatments, the virus is controlled and becomes undetectable in the blood, which means that it cannot be transmitted. And in recent years, promising results with organ transplants in HIV-positive recipients began to emerge.
The reversal of the regulation will also align Spainâs legal framework with European standards, which have removed technical requirements to avoid obsolescence.
It is worth noting that, as El Economista explains, organ transplants for patients with HIV are already performed in Spain, with a total of 800 transplants carried out to date. These include 311 kidney transplants, 510 liver transplants, 11 lung transplants, 10 heart transplants, and one pancreas-kidney transplant. All have yielded good results.
Some good news, for a change.
4. The anti-abortion summit in the Senate building
Welcome to the sixth Transatlantic Summit, an event that took place in Madrid this week and hosted various political representatives from the Americas, Africa and Europe to discuss how to get rid of abortion around the theme âFor freedom and the culture of lifeâ.
You know where this is going, donât you? The event was a mixed bag of far-right political leaders and Christian fundamentalists who are not happy about abortion (and other things like feminism, the LGBTQ+ movement and so-called âwoke cultureâ) and it was already making waves (the bad kind of waves) before it even started because they chose the Senate building as the location of the summit.
Confused? We know. Let us give you some context.
The summit was organized by the Political Network for Values, an international organization chaired by Chilean JosĂŠ Antonio Kast, leader of the countryâs far-right movement (he ran for president in 2021 and lost).
There were representatives of far-right governments from all over the world, such as the Fratelli dâItalia (Giorgia Meloniâs party), Javier Mileiâs Secretary of Worship (Argentina), the VP of Viktor OrbĂĄnâs party (Hungary) and many more!
Representing Spain were Vox partyâs General Secretary Ignacio Garriga (along with other Vox parliamentarians) and former Interior Minister Jaime Mayor Oreja serving as honorary chairman (he served under PM Aznar, of the PP, in the 90s).
Sadly â and weâre being sarcastic here â Kenyan lawmaker George Peter Kaluma, who thinks gay people are Satan worshippers who should be sentenced to life in prison, couldnât make it to the event. He was supposed to speak, but an El PaĂs story detailed his views, he was removed from the list.
But we digress. For a few days, left-wing parties tried to stop the event from taking place in the Senate, as it promoted an ideology that is âincompatible with current legislationâ.
The PP, however, didnât budge. The party holds an absolute majority there and Ester MuĂąoz, the partyâs deputy secretary for health and education, said that the Senate is a public institution whose halls can be requested for events.
And wow did the speakers who made it make plenty of âcolorfulâ statements!
Voxâs Garriga accused the SĂĄnchez government of pushing âa culture of deathâ while Gudrun Kugler, a member of the National Council of Austria, criticized Europeâs decreasing birth rate by saying we have âdecided to go against ethnic continuityâ (because we need immigrants).
Our personal favorite came from former minister Mayor Oreja, who said that among scientists, âthose who defend the truth of creation over the narrative of evolution are prevailingâ. We thought creationism was not a thing in Spain. Turns out we were wrong. (By the way, the scientific community was furious).
Fun times.
5. đ SĂĄnchez announces more accessible housing (again). This time itâs different?
The PSOE held its 41st congress in Sevilla this weekend. Weâre not going to say much about it per se, except that the party faithful gave Dear Leader Pedro SĂĄnchez a loving tongue-bath (which was awkward), booed Franco (which is good), cheered for (most) party members who were being investigated and agreed that was all a plot (this could age badly) and gave SĂĄnchez a new term with 90% of the vote (just like Belarus!).
The big(ish) news? SĂĄnchez announced his government would create a âbig public housing companyâ to build and manage accessible housing for Spaniards. Why do we care? Because there is a massive problem with a lack of accessible housing in Spain.
Details, please! Honestly, thereâs not much on that front. The announcement appears designed to calm the PSOEâs allies on the left (Sumar, Podemos) whoâve been demanding housing, as well as the massive recent marches doing the same (and threatening rent strikes).
We got more info Tuesday. Thatâs when the Minister of Housing and Urban Affairs, Isabel RodrĂguez, said that the âbig public housing companyâ would be launched "imminently", and would have as its "seed" the Sepes public land bank which will be reconverted and "strengthened".
She also said the plan was to include the Sareb bad bank (of housing that went belly up in the bust) and rapidly promote, build and manage 1.5m affordable homes. She pointed to similar programs in Barcelona and Basque Country.
You will not be surprised at the vagueness. This feels like an idea more than a plan. And although accessible housing is super-necessary these days (we mentioned that, right?), âhowâ is the big question. To that end, would you be surprised that the construction and real estate sectors objected to the idea? WellâŚthey did!
The National Federation of Construction, for one. âWe have the best companies in the world to solve housing problems. We do not need a public company, but rather to end legal uncertainty to increase supply, speed up procedures, optimize efforts, shorten the time frames for action and work in a united and coordinated manner, away from political noise,â said president Pedro FernĂĄndez AlĂŠn. (Translation: You know nothing. We got this handled. And we want to make money.)
Colliers EspaĂąa y Portugal boss Miguel Echavarren, for two. He gave a list of 10 skills a public company would have to learn to compete in the market, and added, âWhat could go wrong under the government's management? EVERYTHING.â
Great idea but not super optimistic. In the short term, there will likely be little movement. SĂĄnchez has previously announced 93,000 new public/accessible housing units, and a subsidy for young rentersâneither of which has made a dent (and weâre not sure if theyâve actually happened). But the idea is right. To end, weâll leave you with a few of our fave sad housing stats. đ
Sad story. 66% of young people 18-34 live in their parental home, compared to 50% in 2010. Salaries have gone up less than 20% since 2015 while home prices have gone up over 50% in Madrid, Catalonia and the Balearic Islands. And barely 90,000 new units are being built a year, less than half the numbers in the 1990s.
Happy house hunting!
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