The so-called Rider law, agreed by the Ministry of Labor with employers and unions and which comes into force on 12 August 2021 obliges digital delivery platforms, such as Deliveroo, in practice, to hire their distributors as salaried employees instead of keeping them as self-employed, considering that introduces a presumption of employment “for the activities of distribution of any type of product or merchandise, when the employer exercises its faculty of organization, direction and control, directly, indirectly, or implicitly, through the algorithm management of the service or working conditions, via a digital platform”. 

At the beginning of August, the company announced its intention to leave the country in October 2021, after opening a period of consultations with its workers.

The reason of this decision, based on a company spokesman’s statement, is strictly connected with difficulties for the viability of its business in the country, having not achieved the expected performance.

Deliveroo operates in 12 markets around the world and said the vast majority of its gross transaction value (GVT - a measure used by eCommerce companies that have a marketplace with multiple sellers) — or revenues — came from countries in which it ranked first or second. But in the first half of 2021, Spain had only accounted for “less than 2.0 percent” of its global revenues.

Hadi Moussa, Deliveroo’s International Chief Business Officer, said that “[a]chieving and maintaining a top-tier market position in Spain would require a very high level of investment with very uncertain potential long-term returns,” and that “The decision to propose the cessation of our operations in Spain has not been taken lightly. We want to thank all the restaurants that have worked with Deliveroo in Spain, as well as our valued customers. We show special thanks to the thousands of riders Exceptional and always willing, who have chosen to work with Deliveroo, as well as our talented and fully committed employees. Everyone will be supported during the consultation period”.

The company said it would begin consulting with both staff and riders in early September which would last around a month following which it would issue its final decision.

It is clear that this decision have impact on the labour market in Spain and, even if, based on the company statements, it is not related to the rider-law and its consequences, it reflects the complexity of the gig economy and the sensitivity of the underlying legal relationships.

We have previously reported in our October 2020 issue on the Spanish Supreme Court decision on the employment status of Deliveroo’s workers, as well as  and, in our May 2021 issue, on the approval ofthe ‘Riders’ Law”. There we examined the content and the consequences of the new regulation.