MADRID — Glovo, the popular food delivery application in Spain, has announced that it will transition thousands of its delivery drivers from freelance statuses to full employees after years of advocacy from the Spanish government for more secure labor contracts for app-based workers.

This significant shift in policy comes from Glovo’s parent company, Delivery Hero, based in Berlin, and is intended to eliminate any legal ambiguities surrounding the employment status of its drivers. The company expects this changeover to yield a financial impact of approximately 100 million euros (around $105 million) on their earnings by 2025.

Glovo faced considerable penalties from the Spanish authorities in both 2022 and 2023, having been found in violation of labor regulations. The Spanish labor ministry criticized the company for failing to classify its drivers as employees and for assigning work to undocumented immigrants who did not possess proper work permits.

Labor Minister Yolanda Díaz expressed her commendation of Glovo’s decision on a Spanish television channel, emphasizing that no corporation, regardless of its size or influence, should be above democratic principles.

In 2021, Díaz played a vital role in the enactment of a legislative measure known as the “Riders Law,” which redefined food delivery riders as employees of their respective digital platforms instead of allowing them to be treated as independent contractors.

Currently, Glovo operates across more than 20 countries, with a significant presence in Europe, and this shift towards an employment-based model is likely to impact its operations widely in those regions.