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Glovo, the Spanish subsidiary of the German food delivery service Delivery Hero, is to offer its riders permanent contracts to avoid possible legal uncertainties.<\/p>\n
The step, taken in response to accusations from Spain’s labour authorities, will cut Glovo’s operating profit by millions of euros.<\/p>\n
At the group level, Delivery Hero does not intend to change its previously published annual targets. Investors initially acknowledged the news with a slide in the share price on Monday.<\/p>\n
Until now Glovo has employed its drivers as freelancers, which has drawn criticism from the Spanish authorities over alleged labour law violations.<\/p>\n
Delivery Hero secured a majority stake in Glovo in late 2021.<\/p>\n
The MDax-listed parent company, based in Berlin, also announced that Glovo’s earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for special items, are now expected to be around \u20ac100 million ($105 million) lower in the coming year.<\/p>\n
Nevertheless, it should still be possible to achieve an adjusted profit in day-to-day business.<\/p>\n<\/p><\/div>\n