Uber’s Spanish food delivery platform will pay severance for 4,400 riders

MADRID, (Reuters) – Uber’s food delivery company in Spain has agreed to pay severance payments to 4,400 riders it fired in 2021. This was according to UGT on Tuesday.

Following the Spanish introduction of a new law, food delivery companies were required to employ their couriers as employees instead of contractors.

Uber’s platform, Portier Eats Spain, acknowledged that delivery drivers were collectively dismissed under Spanish law. The union stated in a statement that each driver will be paid the equivalent of 45 days salary per year.

UGT stated that this historic agreement marks the first time that a collective dismissal has been recognized in court.

Uber spokeswoman told Reuters that the agreement was made with Spanish worker unions and aims to compensate couriers who couldn’t access the app after the Rider Law was introduced in 2021.

He said, “We have since launched a new model in complete compliance with the new regulatory framework and are open to dialogue.”

The Spanish law was changed amid heated debates in Europe over the legal status for thousands of delivery drivers who travel across cities in branded backpacks and do not have access traditional employee benefits like minimum wage, paid holidays, or pension rights.

Critics of the law said that it could compromise platforms’ business model and cause labour shortages. Riders complained about the loss of flexibility associated with the gig economy.

Last year, trade unions sued Uber’s Spanish food delivery service platform before the High Court of Spain to contest what they called mass layoffs.

Initial ruling by the court was that the unions’ suit lacked standing.

However, in July, the Supreme Court reaffirmed the High Court’s decision, and mandated a new trial, set for Tuesday. The matter has been settled by Uber’s agreement that it would pay the severance.

(This story was corrected to clarify that riders were “collectively dismissed under Spanish law” and not “actually employed”.

(Reporting done by Emma Pinedo and Inti Latona. Editing done by Jane Merriman, David Goodman.