Under pressure from the Spanish authorities, the food delivery company Glovo will in future employ its delivery drivers in this country on a permanent basis.

This should avoid further legal uncertainty, the German parent company Delivery Hero announced on Monday. In recent years, the Spanish authorities had imposed fines worth millions on Glovo for disregarding employment laws. The company has filed a lawsuit against this.

Delivery Hero expects the change in employment relationships to impact its operating result by around 100 million euros. Nevertheless, Glovo is expected to generate an operating profit in the 2025 financial year. Glovo estimates the contingent liabilities for social security contributions, fines, VAT claims and other surcharges in the current year at between 440 and 770 million euros.

Delivery Hero emphasizes that it does not intend to form any provisions for the additional expenses. The Group also reaffirmed its targets for 2024.

(Report by Hakan Ersen, edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)