Deliveroo plans to stop delivering in Spain due to new ‘rider law’
Just months after the Spanish government promised the new ‘rider law’, Deliveroo has announced its plans to leave Spain weeks before the law comes into effect.
A Deliveroo spokesman said that the new law was not the determining factor for the withdrawal, but it had resulted in leaving the country earlier. In fact, the London-based food delivery service said that Spain would require too much investment, and blamed its small market share.
“Achieving and sustaining a top-tier market position in Spain would require a disproportionate level of investment with highly uncertain long-term potential returns that could impact the economic viability of the market for the company.”
As it stands, the company is uncertain of the margin of profit and doesn’t wish to pursue such a risky endeavour.
The new ‘rider law’ presumes that workers are employees rather than self-employed contractors, meaning all protective laws for employees would come into effect for Deliveroo workers. The law also adds a new section in article 64.4 of the Worker’s Statute, by which the works council has the right to be informed by the company about how computer algorithms and AI systems affect working conditions. The new law is set to come into effect this August 12.
In the UK, Deliveroo’s workers are still treated as independent contractors. The company had recently argued in the court of appeal that workers are self-employed. However, many investors believe this is a key reason why many of Deliveroo’s shares are not being bought.
The delivery service faces competition from companies such as Uber Eats, who outsource their deliverer services to other companies, and Glovo, who plan to hire 2000 delivery drivers permanently as employees. The question is, how long can Deliveroo survive on independent contractors in the modern world?
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