Online Food Delivery: Spain Labor Law & Market Structure Changes | In Practise

Online Food Delivery: Spain Labor Law & Market Structure Changes

Former Head of Enterprise Sales, EMEA, Uber Eats

Why is this interview interesting?

  • Update in new Spanish employment law for drivers
  • Wage per hour changes per delivery driver
  • How Deliveroo, Uber and Glovo can evolve post-labour law changes
  • Impact of minimum order guarantee and free delivery
  • How restaurants can shift direct by working with 3P delivery operators
  • Why Just Eat could be at risk in tier 4 and 5 cities
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Executive Bio

Jesús Rebollo & Jaume Boada

Former Head of Enterprise Sales, EMEA, Uber Eats

Jesús has over 7 years experience in European food delivery at both Just Eat and Uber Eats. He was the Managing Director of Just Eat’s spanish business where he had full P&L responsibility and scaled the marketplace across Spain, setting up third-party logistics agreements with delivery partners. He then joined Uber Eats to manage restaurant relationships and lead enterprise sales across EMEA. Jesús now runs the Spanish business for Jobandtalent, the freelance marketplace.Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Jesús, could you give us a quick introduction to your background please?

JR: I am Jesús Rebollo, currently the managing director of Jobandtalent for Iberia, which is an EU marketplace in the staffing industry. I previously worked in the food delivery industry for over seven years at Just Eat and Uber Eats.

Jaume?

JB: My name is Jaume Boada and I am the country manager at MOX. I have worked at Philip Morris, LIDL and Just Eat, occupying positions from regional manager to head of sales.

Jaume, could you explain how the Spanish delivery legislation has changed?

JB: The new law obligates all food delivery marketplaces to employ their bikers. It will launch in the middle of April and allows companies three months for the implementation. Marketplaces will now pay social security and their workers will have rights to vacation, sick leave and unemployment compensation related to the hours they work.

How will that change the economics, looking at the cost per rider hour in this new model? Roughly how many euro do you think it will cost?

JB: In the previous freelance model bikers were earning €8 per hour whereas in the new model, if they signed with a company like MOX, they would get between €12.50 and €13.50. As you can see, that is a huge difference, with the social security being the principal cost.

That would be the majority of that €5 extra?

JB: Yes, more like €4 or €5.

JR: This is the main difference.

Will MOX employ them, pay their social security as well as an hourly rate to deliver to the marketplaces?

JB: Correct; we are working with Just Eat and, incidentally, Jesús signed the contract with MOX three years ago. Previously, Just Eat guaranteed a minimum forecast but now they simply provide us with branding for the riders who are exclusive.

Jesús, what year did you sign the contract with MOX and in what context?

JR: It was ages ago, but when we were working at Just Eat it was very important to be legally compliant. We were not interested in the independent contractor route but wanted to add value to the industry and also differentiate ourselves. Three or four years ago Glovo, Deliveroo and Uber Eats were entering Europe and employed the gig economy model which changed the future of work globally. At the time, we collaborated with independent fleet managers such as MOX.

We were not service recruitment experts so we found logistic partners to help us by approaching MOX and others. Legislation changes differ depending on the country but we are entering a world where it is clear we need to provide more value to the gig economy. We need to improve the social rights and benefits of those employees while simultaneously finding the right balance between giving more social benefits and helping the industry to keep innovating and creating added value. Food delivery has had a massive impact on the restaurant industry.

I cannot imagine this pandemic without the likes of Uber Eats, Just Eat, Glovo, Deliveroo and others so we need to praise those entrepreneurs who created new business models. In Spain we should find a balance between the gig economy and sector regulation, such as in France.

Did Uber and Glovo use the freelance model only or did they also use MOX?

JB: When Glovo launched two years ago, we tested in several cities. We also worked with Uber in 2019 and they hired many bikers through MOX, but in 2020 they changed their model again and went the freelance route. Today they are thinking about changing the model again.

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Online Food Delivery: Spain Labor Law & Market Structure Changes

April 12, 2021

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