Glovo recognizes another claim of 100 million from Social Security for contributions and fees

Social Security tightened its grip on Glovo, the food delivery platform, last July with a claim for 450 million euros for unpaid fees and fines related to its previous work model, which it introduced in August 2021. Its parent company, the German group Delivery Hero, reflected this in its semi-annual report and, following Spanish legislation, provided for the payment to be paid during the second half of the year pending final judicial decisions.

This Thursday, within the framework of the presentation of the company’s quarterly results, Marie-Anne Popp, the group’s financial manager, acknowledged to her analysts that They expect to receive around “100 million additional euros in the coming months” of contingencies after guaranteeing that the payment of the 450 million “has been carried out to a large extent.” Sources from the German entity clarify to this medium that the new provision introduced by its board corresponds to the same Social Security claim.

The expansion of this provision is part of the estimates that the owner of Glovo estimated in previous presentations at up to 860 million euros in potential labor claims. It should be noted that the scope of these obligations led the group to express months ago, as in previous years, “a significant uncertainty regarding the ability of Glovoapp23 SA, Spain, to continue as a going concern.”

The origin of these obligations dates back to last May 2021, when the Government gave the green light in the Council of Ministers to what is known as the Rider Law to recognize, for the first time, digital platform delivery people as employees and not self-employed. Despite this, Glovo did not give in to pressure and did not modify its hiring model until this year, when it began hiring its delivery drivers. However, from the German group, as they comply with all payment obligations, they continue to insist that their workers were self-employed through all available instances.

In this context, Delivery Hero recognizes in its accounts that the European market has suffered a temporary negative impact derived from the transition to the new labor model in Spainwhich “caused a short-term increase in shipping costs and a temporary reduction in GMV (gross merchandise value) growth.” However, the company noted that the business has begun to show a gradual recovery, and anticipates further margin expansion in the fourth quarter, as operational efficiency normalizes under the new employment scheme.

Pay the fine of 329 million imposed by Brussels

This is not the only front that the company has had to take on this quarter in the contingency chapter. In the same period, as confirmed by its financial director to analysts, they have already made the payment of the 329 million euros that Brussels imposed on Delivery Hero (223.3 million) and Glovo (105.7 million) for setting up a food delivery cartel before their merger. In the general calculation, the results of the German platform until September continue above those recorded the previous year with 21.5% more billing – with adjustments for inflation included -, up to 3,736 million, despite slowing the GMV to 12,179 million, 0.6% less in the absolute comparison.