Glovo adapts new law

Several media including CincoDías (in Spanish) reported that the Spanish delivery platform, Glovo, will hire 2,000 distributors there in 2021. Glovo will adapt its operations to the new law against riders, which is approved by the Government on May 11. In fact, the law came into force on August 12.

Who is Glovo?

Glovo offers its service from Barcelona to the world. In fact, Glovo is the app that allows users to get the best products in their city. Oscar Pierre and Sacha Michaud founded Glovo in early 2015.

Oscar, after studying and seeing the emerging on-demand economy in the US, came back to Barcelona to start Glovo. In Barcelona he met Sacha, a seasoned tech entrepreneur. After that, Glovo has launched in 21 countries and over 876 cities worldwide. As a result, it is the largest on-demand platform founded out of mainland Europe, having delivered over 224M orders.

Uber in the UK

As we can the case of Uber in the UK, the delivery platform companies face sustainability issues now.

The UK’s Supreme Court ruled that Uber must treat its drivers as workers rather than self-employed. This decision could mean that Uber drivers can take worker’s benefit including minimum wage and holiday pay. The ruling has a huge influence on the gig economy.

However, Uber stated that the ruling affected a small number of drivers. This is because it had already made changes to its business. Uber had finally appealed to the UK’s Supreme Court after losing three earlier rounds. This is not only case for the UK, and there are several legal battles related to the status of worker or self-employed across the globe. The ruling could be a cornerstone for this issue.

Series F Funding

Of course, if Glovo treats its drivers as workers, it means the increase of human expenses. However, its business is not sustainable without them at the same time. Thus, the Spanish startup must find a solution to observe the law and to make its business profitable.

In April 2021, Glovo picked up a Series F funding of $528mn (€450mn). The amount was the largest-ever round raised by a Spanish startup. Probably, the company make use of this funding to adjust its business.

Non-marketing strategy

When ride-hailing companies such as Uber became popular, many of us around the world praised its model, gig economy. This is because it makes use of our assets that are not using. What’s more, self-employed workers can choose when and where they want to work. It sounds good, but they gradually understand nothing guarantees their status. As a result, the movement to guarantee their condition started and the governments in the world could not miss it. The UK’s Supreme Court’s decision is just one example.

When it comes to the business perspective, what will we learn from? One of our key take away is non-marketing strategy. As for marketing, there are several famous frameworks and “3C”, which represents Company, Consumer and Competitor respectively, is an example.

However, our business environment becomes more complicated, so many companies cannot ignore other players including NGOs, governments and regulators. Both Glovo and Uber must consider non-marketing strategy more seriously now. This is true for small and medium companies, but the problem here is that they have fewer resources to research. Thus, business intelligence media like us becomes more useful.