Madrid, Jul 30 (EFE).- Online delivery company Deliveroo on Friday announced a proposal to end its operations in Spain following a new law requiring the company to hire its freelance riders.
The app-based firm, which has some 2,500 riders in Spain working with over 10,000 restaurants in 70 cities and towns, filed the statement with the London Stock Exchange, where it is listed.
“The Company has determined that achieving and sustaining a top-tier market position in Spain would require a disproportionate level of investment with highly uncertain long-term potential returns that could impact the economic viability of the market for the Company,” it said.
The Spanish government in May passed legislation requiring services like Deliveroo to hire freelance riders as salaried workers in a bid to strengthen regulation in the gig economy.
The change, which will take effect in August, means social security contributions for state pensions and unemployment benefits would come from the salaries rather than being paid by the riders themselves.
Some riders in the sector protested the rule change but the Riders x Derechos union on Friday tweeted: “The message is clear, if they (Deliveroo) have to comply with labor laws, they are not interested in operating here.
“If they don’t want to comply with the Statute of Workers, our message is very clear: close the door on your way out.”
Deliveroo said it would begin a consultation with the affected employees and riders in Spain, which is due to begin in early September.EFE