Glovo bags two grocery picking and delivery startups

More startup swapping in the food delivery space: Spain’s Glovo, an on-demand delivery platform which operates a network of dark stores focused on urban convenience shopping, is pushing deeper into planned grocery shopping — announcing the acquisition of two regional ‘Instacart-style’ grocery picking and delivery startups, Madrid-based Lola Market and Portugal’s Mercadão.

Terms of the acquisitions are not being disclosed.

2015-founded Lola Market had raised around €3M, per Crunchbase. It’s not clear how much Portugal’s Mercadão — which was founded in 2018 — had raised over its shorter run.

Glovo, meanwhile, raised a meaty $528M Series F back in April — but quickly splurged $208M to pick up three food delivery brands from rival Delivery Hero in Central and Eastern Europe.

The Spanish on-demand delivery platform is facing challenges to its model on home turf where the government has applied a labor reform aimed at delivery workers in the gig economy.

The reform, agreed earlier this year, came into application last month — recognizing delivery platform riders as employees, or at least on paper.

Glovo responded by imposing a new self-employment model on the vast majority of riders on its platform, hiring only around a fifth. So the scene looks set for legal challenges in its home market.

At the European Union level, lawmakers are also eyeing how to improve conditions for platform workers — and could come with pan-EU legislation that has wider implications for the business models of regional players like Glovo.

Ongoing regulatory challenges over employment classification and algorithmic management of workers in the gig economy may offer some context for Glovo’s expanding interest in grocery purchasing in Europe, where it has been building out a network of dark stores to power what it calls ‘Q-commerce’ (aka, quick urban convenience shopping).

As well as for its recently announced international expansion in Africa, where it has said it will be doubling down investment over the next 12 months.

But also the challenge of hitting profitability for pure on-demand food delivery looks like a sizeable piece of the puzzle here driving consolidation.

By adding players in the supermarket and retail outlet picking delivery space, Glovo expands its coverage of shoppers’ needs — and can nudge users to spend more by being able to cross-sell them on planned purchases (such as the weekly grocery shop), as well as what it bills as “emergency essentials” and “fast action convenience” powered by the more limited inventory it can offer in its city center dark stores.

Both Lola Market and Mercadão’s brand identities will be retained, per Glovo, which also says they will operate independently — led by Gonçalo Soares da Costa, CEO of Mercadão.

It touts the acquisitions as strengthening its competitive position in Europe in “key markets” — going on to suggest it will add grocery picking and delivery across its entire market footprint, with an initial expansion planned for Poland and Italy.

Also today it said its Q-Commerce division is “on track” to reach an annual Gross Transaction Value (GTV) of more than €300M this year — adding that it expects that to more than triple by the end of 2022, projecting it will surpass a run rate of €1BN.

Commenting on its latest acquisitions in a statement, Oscar Pierre, CEO and co-founder of Glovo, added: “We see huge potential in the on-demand groceries marketplace and both companies are strong local players in their respective markets, and further strengthen our Q-Commerce offering.

“With Lola Market and Mercadão on board, we can build stronger partnerships with retailers, offer our users big-basket purchases and provide a more complete service. These acquisitions represent a significant step forward for us, as we’re now able to cover all of the main purchasing considerations for groceries customers, making Glovo a one-stop-shop for e-groceries.”

#apps, #delivery-hero, #delivery-startups, #e-groceries, #europe, #food, #food-delivery, #glovo, #grocery-store, #instacart, #madrid, #online-food-ordering, #oscar-pierre, #portugal, #spain

Glovo to double down African investment in the next 12 months but will it stay put?

Spanish on-demand delivery platform Glovo today announced plans to double its investment in Africa and expand its operations on the continent.

The Barcelona-based company has invested up to €25M ($30M) by bringing its food delivery service to six African countries — Morocco, Uganda, Kenya, Ghana, Côte d’Ivoire, and Nigeria.

Glovo is available in more than 40 cities with more than 300,000 users, 8,000 restaurants and 12,000 couriers in these countries. Earlier this year, it launched operations in Lagos, Nigeria and Accra, Ghana before expanding to Tema, another Ghanaian city last month.

Over the next 12 months, Glovo says it will invest an additional €50M ($60M) to drive expansion into more cities on the continent and move into new markets like Tunisia, where it plans to launch in Tunis next month.

According to a statement released by the company, the expansion will make Glovo’s services available to 6.5 million people. Co-founder Sacha Michaud believes these markets are currently underserved, and Glovo has found the right opportunity to work with local restaurants, bringing them online to reach new customers in a bid to “make everything, within all towns and cities, available to everyone.”

The attention on Africa follows a series of regional moves Glovo has pulled this year. After its mammoth $528 million Series F raise, it acquired several Delivery Hero’s businesses in Central and Eastern Europe for $208 million.

Now present in 23 countries, Africa represents 30% of the company’s geographical footprint. And the Spanish company plans to be live in 30 countries before the end of next year, a decision in part due to an IPO target in three years.

Glovo says it is a market leader in 80% of the countries where it has operations. The company’s grocery service arm has grown the fastest and revenue has been increasing significantly after a steady rise in orders. To meet the growing needs of customers, Glovo has had to invest heavily in dark stores and in July also launched virtual brands for restaurants.

It’s not clear if Glovo will extend these add-on services to Africa where it has its largest market in terms of population size: Nigeria. Yet, the West African nation does not come without its own fair share of troubles like poor logistics infrastructure and an unpredictable regulatory environment.

Despite that, a couple of food delivery platforms like Gokada and Jumia Food, a subsidiary of e-commerce giant Jumia have tried to scale, finding varying degrees of success doing so.

While Glovo will have to compete for market share with these players, the company says it is bullish because of its multi-category strategy. According to the company, grocery sales account for half of its business in some African markets.

That said, Glovo’s performance in emerging markets is questionable. Last year, the company pulled out of all the Latin American countries — Argentina, Ecuador, Peru, Panama, Costa Rica, Honduras, Guatemala, and the Dominican Republic. It sold operations in these markets to Delivery Hero for $272 million.

The company also exited the Middle East and North Africa (Egypt and Turkey) and Uruguay and Puerto Rico in January 2020.

Over the past couple of years, Glovo has said it wanted to achieve profitability in a short amount of time. The delivery space is a thin-margin business and it is thinner in emerging markets. This played a part in why Glovo exited both Middle East and Latin America. The market isn’t any different in Africa, and time will tell if the Spanish delivery will stay put, exit, or close shop.

Whatever the case, Glovo says it is “committed to continuing its policy to hire top local talent” on the continent and plans to double its number of staff and add an extra 200 employees before the end of next year.

“Our expansion in Nigeria, Ghana, and our upcoming launch in Tunisia is something we’ve been looking at for some time now, so it’s great to be able to make it official. There’s been an unprecedented spike in the on-demand delivery business in Africa and the expansion of our services to new countries and cities is both a reflection of that trend and a testament to our commitment to the continent. We’re looking forward to making food, groceries, pharmaceuticals and retail products available to our new users at the touch of a button,” William Benthall, Glovo’s general manager of sub-Saharan Africa, said in a statement.

#africa, #delivery-hero, #e-commerce, #food, #food-delivery, #glovo, #jumia, #tc

Italy’s DPA fines Glovo-owned Foodinho $3M, orders changes to algorithmic management of riders

Algorithmic management of gig workers has landed Glovo-owned on-demand delivery firm Foodinho in trouble in Italy where the country’s data protection authority issued a €2.6 million penalty (~$3M) yesterday after an investigation found a laundry list of problems.

The delivery company has been ordered to make a number of changes to how it operates in the market, with the Garante’s order giving it two months to correct the most serious violations found, and a further month (so three months total) to amend how its algorithms function — to ensure compliance with privacy legislation, Italy’s workers’ statute and recent legislation protecting platform workers.

One of the issues of concern to the data watchdog is the risk of discrimination arising from a rider rating system operated by Foodinho — which had some 19,000 riders operating on its platform in Italy at the time of the Garante’s investigation.

Likely of relevance here is a long running litigation brought by riders gigging for another food delivery brand in Italy, Foodora, which culminated in a ruling by the country’s Supreme Court last year that asserted riders should be treated as having workers rights, regardless of whether they are employed or self-employed — bolstering the case for challenges against delivery apps that apply algorithms to opaquely micromanage platform workers’ labor.

In the injunction against Foodinho, Italy’s DPA says it found numerous violations of privacy legislation, as well as a risk of discrimination against gig workers based on how Foodinho’s booking and assignments algorithms function, in addition to flagging concerns over how the system uses ratings and reputational mechanisms as further levers of labor control.

Article 22 of the European Union’s General Data Protection Regulation (GDPR) provides protections for individuals against being solely subject to automated decision-making including profiling where such decisions produce a legal or similarly substantial effect (and access to paid work would meet that bar) — giving them the right to get information on a specific decision and object to it and/or ask for human review.

But it does not appear that Foodinho provided riders with such rights, per the Garante’s assessment.

In a press release about the injunction (which we’ve translated from Italian with Google Translate), the watchdog writes:

“The Authority found a series of serious offences, in particular with regard to the algorithms used for the management of workers. The company, for example, had not adequately informed the workers on the functioning of the system and did not guarantee the accuracy and correctness of the results of the algorithmic systems used for the evaluation of the riders. Nor did it guarantee procedures to protect the right to obtain human intervention, express one’s opinion and contest the decisions adopted through the use of the algorithms in question, including the exclusion of a part of the riders from job opportunities.

“The Guarantor has therefore required the company to identify measures to protect the rights and freedoms of riders in the face of automated decisions, including profiling.

The watchdog also says it has asked Foodinho to verify the “accuracy and relevance” of data that feeds the algorithmic management system — listing a wide variety of signals that are factored in (such as chats, emails and phone calls between riders and customer care; geolocation data captured every 15 seconds and displayed on the app map; estimated and actual delivery times; details of the management of the order in progress and those already made; customer and partner feedback; remaining battery level of device etc).

“This is also in order to minimize the risk of errors and distortions which could, for example, lead to the limitation of the deliveries assigned to each rider or to the exclusion itself from the platform. These risks also arise from the rating system,” it goes on, adding: “The company will also need to identify measures that prevent improper or discriminatory use of reputational mechanisms based on customer and business partner feedback.”

Glovo, Foodinho’s parent entity — which is named as the owner of the platform in the Garante’s injunction — was contacted for comment on the injunction.

A company spokesperson told us they were discussing a response — so we’ll update this report if we get one.

Glovo acquired the Italian food delivery company Foodinho back in 2016, making its first foray into international expansion. The Barcelona-based business went on to try to build out a business in the Middle East and LatAm — before retrenching back to largely focus on Southern and Eastern Europe. (In 2018 Glovo also picked up the Foodora brand in Italy, which had been owned by German rival Delivery Hero.)

The Garante says it collaborated with Spain’s privacy watchdog, the AEDP — which is Glovo’s lead data protection supervisor under the GDPR — on the investigation into Foodinho and the platform tech provided to it by Glovo.

Its press release also notes that Glovo is the subject of “an independent procedure” carried out by the AEPD, which it says it’s also assisting with.

The Spanish watchdog confirmed to TechCrunch that joint working between the AEPD and the Garante had resulted in the resolution against the Glovo-owned company, Foodinho.

The AEPD also said it has undertaken its own procedures against Glovo — pointing to a 2019 sanction related to the latter not appointing a data protection officer, as is required by the GDPR. The watchdog later issued Glovo with a fined of €25,000 for that compliance failure.

However it’s not clear why the AEDP has — seemingly — not taken a deep dive look at Glovo’s own compliance with the Article 22 of the GDPR. (We’ve asked it for more on this and will update if we get a response.)

It did point us to recently published guidance on data protection and labor relations, which it worked on with Spain’s Ministry of Labor and the employers and trade union organizations, and which it said includes information on the right of a works council to be informed by a platform company of the parameters on which the algorithms or artificial intelligence systems are based — including “the elaboration of profiles, which may affect the conditions, access and maintenance of employment”.

Earlier this year the Spanish government agreed upon a labor reform to expand the protections available to platform workers by recognizing platform couriers as employees.

The amendments to the Spanish Workers Statute Law were approved by Royal Decree in May — but aren’t due to start being applied until the middle of next month, per El Pais.

Notably, the reform also contains a provision that requires workers’ legal representatives to be informed of the criteria powering any algorithms or AI systems that are used to manage them and which may affect their working conditions — such as those affecting access to employment or rating systems that monitor performance or profile workers. And that additional incoming algorithmic transparency provision has evidently been factored into the AEPD’s guidance.

So it may be that the watchdog is giving affected platforms like Glovo a few months’ grace to allow them to get their systems in order for the new rules.

Spanish labor law also of course remains distinct to Italian law, so there will be ongoing differences of application related to elements that concern delivery apps, regardless of what appears to be a similar trajectory on the issue of expanding platform workers rights.

Back in January, for example, an Italian court found that a reputation-ranking algorithm that had been used by another on-demand delivery app, Deliveroo, had discriminated against riders because it had failed to distinguish between legally protected reasons for withholding labour (e.g., because a rider was sick; or exercising their protected right to strike) and other reasons for not being as productive as they’d indicated they would be.

In that case, Deliveroo said the judgement referred to a historic booking system that it said was no longer used in Italy or any other markets.

More recently a tribunal ruling in Bologna — found a Collective Bargaining Agreement signed by, AssoDelivery, a trade association that represents a number of delivery platforms in the market (including Deliveroo and Glovo), and a minority union with far right affiliations, the UGL trade union, to be unlawful.

Deliveroo told us it planned to appeal that ruling.

The agreement attracted controversy because it seeks to derogate unfavorably from Italian law that protects workers and the signing trade body is not representative enough in the sector.

Zooming out, EU lawmakers are also looking at the issue of platform workers rights — kicking off a consultation in February on how to improve working conditions for gig workers, with the possibility that Brussels could propose legislation later this year.

However platform giants have seen the exercise as an opportunity to lobby for deregulation — pushing to reduce employment standards for gig workers across the EU. The strategy looks intended to circumvent or at least try to limit momentum for beefed up rules coming a national level, such as Spain’s labor reform.

#algorithmic-accountability, #artificial-intelligence, #barcelona, #deliveroo, #delivery-hero, #europe, #european-union, #food-delivery, #gdpr, #general-data-protection-regulation, #glovo, #italy, #labor, #online-food-ordering, #policy, #privacy, #spain

Kenyan foodtech startup Kune raises $1M pre-seed for its ready-to-eat meals service

While there has been a wave of innovation in food tech worldwide, it’s still in early days for Africa. There are only a handful of African food-tech startups, and a year and a half’s worth of global pandemic has added a couple to that list.

Kune is one of the most recent food-tech startups, and today, the six-month-old Kenyan-based company is announcing that it has closed a $1 million pre-seed round to launch its on-demand food service in August.

Pan-African venture capital firm Launch Africa Ventures led the pre-seed round. Other investors that took part include Century Oak Capital GmbH and Consonance, with a contribution from ecosystem management firm Pariti

Founded by CEO Robin Reecht in December 2020, Kune delivers freshly made, ready-to-eat meals at arguably affordable prices. When Reetch first came to Kenya from France in November 2020, it wasn’t easy to get affordable ready-to-eat meals.

“After three days of coming into Kenya, I asked where I can get great food at a cheap price, and everybody tell me it’s impossible,” he told TechCrunch. “It’s impossible because either you go to the street and you eat street food, which is really cheap but with not-so-good quality, or you order on Uber Eats, Glovo or Jumia, where you get quality but you have to pay at least $10.”

Reetch noticed a gap in the market and sought to fill it. The next month, he decided to start Kune. The goal? To provide affordable, convenient and tasty meals. It took a week to develop a pilot, and with a ready waitlist of 50 customers in a particular office space, his plans were in motion. Kune sold more than 500 meals ($4 average) and tripled its customer base from 50 to 150.

Customers were particularly excited about the product and Kune raised $50,000 from them to continue operations, Reetch said. After that, however, the orders became too large for the small team that they couldn’t keep up; at one point, it received 50 orders per day. Thus, instead of advancing with a momentum that could break down, the team took a hiatus.

“We had started to mess up the order because, you know, it’s complicated to get food right when you’re just in a small kitchen setting. So I said okay, that there is no point doing that, and the demand is so high and better to do things right.”

The next months were spent restructuring the company, making hires and building a factory to produce 5,000 meals per day. Then, when the company was ready to raise, Reetch said he saw the same enthusiasm from customers and investors. In two months, Kune closed this round, one of the largest in East Africa, and is one of the few non-fintechs to have raised a seven-figure pre-seed round on the continent.

In a fast-growing and crowded restaurant and food delivery marketplace in Kenya, Kune wants to offer a new way for busy people in Nairobi to access meals by finding a balance between Kibanda pricing (usually referred to as the typical local roadside food shop) and on-demand food delivery prices from global companies.

Kune applies a hybrid model, combining both cloud and dark kitchen concepts. Kune meals are cooked and packaged in its factory and delivered directly to online, retail and corporate customers.

The hybrid model speaks to why Launch Africa cut a check for Kune. And according to the director of the firm, Baljinder Sharma, “leveraging the cloud kitchen model and owning the entire supply chain provides a massive growth and scaling opportunity for Kune Africa.” He added: “We are looking forward to seeing the business take off and grow.”

Kune plans to fully launch in August after its new factory is completed. Per details on its site, the company is promising customers that delivery will be done on an average of 30 minutes daily.

To achieve this, Kune ensures that it owns the entire supply chain, from cooking to packaging to delivery with its own drivers and motorbikes. “Our strategy is to internalize all production and human resources capacities,” he stated. That’s where Kune will put most of the funds to use going forward. In addition to the factory, which costs about 10% of the total investment, Kune will be looking to build a huge team. Reetch tells me that judging by how operations-heavy Kune is, the team size will reach 100 come December.

Once launched, the company will build its own fleet of 100 electric motorcycles by early 2022. In addition, there are plans to hire 100 female drivers.

Currently, Kune showcases three different meals daily: two continental dishes and one foreign meal. In the coming months and quarters, Kune’s offerings will cut across microwavable meals, weight reduction meals and retail meals to target European and U.S. clients. For the latter, Reetch is enthusiastic about exporting the African food culture to Western countries. As someone who travels a lot, the CEO thinks Kenya, unlike other countries, doesn’t have a strong food culture. He references food media like TV shows where various meals and cuisines and tutorings on how to cook food are showcased. Reetch wants Kune to be the go-to for such programs in Kenya.

“In Kenya, we don’t have any culinary show. So we are going to take that position as the culinary major of Kenya, and how do you create this? By creating amazing content, which we plan to do by creating videos and writing articles on how to cook or maybe just food business in general.”

#africa, #east-africa, #food, #food-delivery, #food-tech, #funding, #glovo, #kenya, #kune, #launch-africa, #online-food-ordering, #pariti, #recent-funding, #startups, #tc

Glovo splurges $208M on three Delivery Hero brands in the Balkans

The high stakes game of chess (or, well, consolidation chicken) that is on-demand food delivery rolls on today with a little more territorial swapping in Europe: Barcelona-based Glovo has agreed to buy three of Berlin-based Delivery Hero’s food delivery brands in Central and Eastern Europe — with deals that it said are worth a total value of €170 million (~$208M).

Specifically, it’s picking up Delivery Hero’s foodpanda brand in Romania and Bulgaria; the Donesi brand in Serbia, Montenegro, Bosnia and Herzegovina; and Pauza in Croatia.

There’s some notable symmetry here: Last year Delivery Hero shelled out $272M for a bunch of Glovo’s LatAm brands, as the latter gave up on a region it had already started withdrawing from in its quest for profitability.

Glovo said then that it would be focusing on “key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers”.

Earlier this month the Barcelona-based ‘deliver anything’ app also announced it was picking up Ehrana, a local delivery company in Slovenia. So it’s been on quite the (local) shopping spree of late.

Its existing operational footprint covers markets in South West Europe, Eastern Europe and Sub-Saharan Africa. So its attention here, on the Balkans, suggests it sees a chance to eke out profitable potential in more of Central Europe too.

Glovo said the transactions in Bosnia Herzegovina, Bulgaria, Croatia, Montenegro and Serbia are expected to close “within the next few weeks”, subject to fulfilment of closing conditions and relevant regulatory approvals.

While it said Romania will be completed following approval from the competition authority — but gave no timeline for that.

Its splurge on Central and Eastern European rival food delivery brands follows a $528M Series F funding round in April — so it’s evidently not short of VC cash to burn spend.

Commenting in a statement, Oscar Pierre, CEO and co-founder, said: “It’s always been central to our long-term strategy to focus on markets where we see clear opportunities to lead and where we can build a sustainable business. Central and Eastern Europe is a very important part of that plan. The region has really embraced on-demand delivery platforms and we’re very excited to be strengthening our presence and increasing our footprint in countries that continue to show enormous potential for growth.” 

In another supporting statement Delivery Hero made it clear it has bigger fish to fry (than can be served up to hungry customers in the Balkans) right now.

“Delivery Hero has built a clear leading business in the Balkan region in the last couple of years. However, with a lot of operational priorities on our plate, we believe Glovo would be better positioned to continue building an amazing experience for our customers in this region,” said Niklas Östberg, its CEO and co-founder.

A relevant, recent development for Delivery Hero‘s business is the decision to re-enter its home market of Germany — Europe’s biggest economy — under its foodpanda brand, starting in its home city of Berlin this summer (but with a national expansion planned to follow).

This is notable because back in 2018 it sold its German operations to another on-demand food delivery rival, the Dutch giant Takeaway.com — in a $1.1BN deal which included the Lieferheld, Pizza.de and foodora brands — temporarily stepping out of the competitive fray. (Meanwhile Takeaway.com has since merged with the UK’s Just Eat to become… Just Eat Takeaway so, uh, keep up.)

Delivery Hero is returning to Germany now because it can, and because the market is huge. A two-year non-compete clause between it and Just Eat Takeaway recently expired — allowing for reheating (rehashing?) of the competitive food delivery mix in German cities.

Speaking to the FT back in May about this market return, Östberg suggested Delivery Hero has girded itself (and its investors) for a long fight.

“We don’t see necessarily that we are going to go in and win the market in the next year or so. This is a 10-year game,” he said. “Of course we will definitely make sure we put in enough money to be the clear number two, the clear challenger [to Just Eat Takeaway.com].”

Winning at food delivery is certainly a(n expensive) marathon, not a sprint.

There are also of course multiple races being run in markets around the world, depending on local conditions and competitive mix — with the chance that the winner of the biggest and most lucrative races will reach such a position of VC-sponsored glory that it can buy up the top competitors from the smaller races and consolidate everything — maximizing economies of scale and gaining the ability to squeeze out fresh competition to grab a juicy profit for themselves.

Or, well, that’s the theory. Competition regulators are likely to take increasing interest in this space, for one thing. Rising awareness of gig economy workers rights is also putting pressure on the model.

For now, the thin-margin food delivery business needs the right base conditions to survive. The model only functions in cities and ideally in highly dense urban environments. Most of the players in this space also do not employ the armies of riders that are needed to make deliveries — because doing so would make the model far more costly. And in Europe political attention on gig economy workers rights could force reforms that raise regional operational costs, putting further pressure on margins.

Spain has its own labor reforms in train that will affect Glovo in its home market, for example.

Achieving sustainability (i.e. profitability without the need for ongoing VC funding injections) remains a huge hurdle for delivery apps. It will likely require massive market consolidation and/or convincing users to switch from making the occasional order of a hot meal on a weekend to relying on app-based delivery for far more of their local shopping needs — not just lunch/dinner but groceries and toiletries, and other fast moving consumers goods and household items.

It’s notable that super fast grocery delivery is a major focus for Glovo, for example — which has recently been building out networks of inner city dark stores to service in-app convenience store shopping.

Lots of other on-demand app players are also ramping up on that front. Including Delivery Hero — which has been paying more attention to groceries (picking up InstaShop last year in a deal worth $360M).

Glovo building out in Central Europe while exiting markets further afield suggests it believes it can use a concentrated market footprint to drive operational efficiencies and strong order margins through a tightly integrated meal delivery and dark store play.

If it can do that — and offer at least the whiff of profitability — it could make its business an attractive future acquisition target for a larger global giant that’s looking to up the ‘consolidation chicken’ stakes by bolting on new regions.

A larger player like Delivery Hero may even be a potential future suitor — having shown it’s happy to return to markets it left earlier. After all, it surely knows Glovo’s business pretty well since they’ve done a number of market swaps. But, for now, that’s pure speculation.

Zooming out, what the on-demand model of app-based urban convenience means for the future of urban environments is a whole other question — and one which both competition and urban regulators will need to ponder very carefully.

If the rush to scale delivery platforms drives unstoppable consolidation that sees smaller players gobbled up by a few global giants — that can then use their size and scale to outcompete local shops — it may spell even more dark times for the traditional High Street and its family-run bodegas which have already been hammered by Internet giants like Amazon.

Touch of a button convenience does carry wider costs.

 

#amazon, #apps, #balkans, #barcelona, #berlin, #bulgaria, #central-europe, #croatia, #delivery-hero, #eastern-europe, #europe, #food, #food-delivery, #foodpanda, #fundings-exits, #germany, #glovo, #just-eat-takeaway, #just-eat, #montenegro, #niklas-ostberg, #online-food-ordering, #oscar-pierre, #retailers, #romania, #take-out, #takeaway-com, #tc, #united-kingdom

Spain agrees on labor reform that will recognize delivery platform riders as employees

Spain’s government has reached an agreement with trade unions and business associations over labor reforms that will see delivery platform couriers recognized as employees, it said today.

Once such a law is passed, the development could have major ramifications for platforms operating in the market — which include the likes of Deliveroo, Glovo and UberEats, to name a few.

“The Ministry of Labor and Social Economy, the trade union organizations CCOO and UGT and the business organizations CEOE and CEPYME have reached an agreement to establish the employment status of workers dedicated to the delivery or distribution of any consumer product or merchandise through platforms digital,” the ministry said in a statement (which we’ve translated from Spanish)

“The agreement recognizes the presumption of employment of workers who provide services through digital delivery platforms, in line with the Supreme Court ruling,” it added.

“The presumption of employment is recognized for workers who provide paid distribution services through companies that manage this work through algorithmic management of the service or working conditions, through a digital platform.”

 

Agreement on the reform means the government can now start to move forward with the legislative process after many months negotiating on exactly how to change labor laws.

The timing looks especially interesting as the European Union is also considering how to improve conditions for gig workers more broadly — so Spain’s plan to legislate, ahead of other EU countries, to recognize a subset of gig workers as employees could be influential in shaping wider regional policy.

Wider reforms in Spain aimed at supporting growth of digital business also come with a strong social inclusion component, with the government saying no one should be left behind in a drive to modernize.

The labor reform agreement follows a number of legal challenges in Spain in recent years over the classification of delivery riders. There have been varying outcomes in the courts but last year Spain’s Supreme Court ruled against homegrown delivery platform, Glovo, in a case relating to the employment classification of a courier — putting a stamp of finality on the matter as it also declined to refer questions to Europe’s top court.

Delivery platforms in the market have suggested the impact of the planned reform could result in thousands of couriers losing their source of income.

Up to 30,000 couriers are reported to provide services on delivery platforms in Spain.

There have also been accusations that platforms are being unfairly singled out as a politically easier target vs other more established industries which also rely on labor provided by ‘autónomos‘ (self-employed) workers.

However delivery startups have been less vocal about what a legal requirement to put couriers on the payroll would mean for their business model — or, indeed, their (ongoing) quest for profitability.

Responding to news of Spain’s labor reform agreement, Mark Tluszcz, CEO at Mangrove Capital Partners — who has been a long time critic of the gig platform business model — told TechCrunch: “We have long taken the view that gig platforms would have to go through significant structural changes driven by individual countries’ laws. Unless gig workers are recognized as employees, we risk creating a subclass of workers that don’t have adequate rights or social coverage. The pandemic has clearly illustrated the need to ensure all workers have protections and it is increasingly difficult for gig platforms to argue otherwise.”

Workers must see algorithmic workings

In an interesting additional component to the reform agreement announced today, the government said the incoming legislation will require that workers’ legal representatives are informed of the criteria powering any algorithms or AI systems that are used to manage them and which may affect their working conditions.

Its statement specifies that this includes algorithmic systems that are related to access to employment and for any rating systems that monitor performance or profile workers.

This component looks like it’s taking inspiration from a number of recent legal challenges in Europe which have focused on ride-hailing platforms’ algorithmic management and drives’ access to data the platforms hold on them.

James Farrer, a former Uber driver who successfully challenged the company’s employment classification in the UK — where the Supreme Court recently held that the challenging drivers are workers — and who is also involved in the more recent algorithm and data access challenges, has set up a not-for-profit with the aim of establishing a data trust for drivers for the purpose of collective bargaining.

Spain’s unions appear to be taking a similar tack by pushing for access to the algorithmic rules that are used to manage couriers as a tool to tackle the power asymmetry between platforms and workers.

A spokesperson for Uber sent us this statement in response to the Spanish government’s announcement:

“Over the past few weeks, thousands of couriers across the country have come together to stand against this proposed regulation that would deprive them from the independence they value most. At Uber, we are fully committed to raising the standard of work and giving independent workers more benefits while preserving flexibility and control. We want to work with all relevant parties across Spain to improve independent work, instead of eliminating it.”

Deliveroo also sent us this statement:

“This proposal goes against the interests of riders who value flexible work, restaurants who benefit from delivery services and customers who value on-demand delivery. Thousands of riders who took to the streets to protest their desire to remain self-employed have had their voices ignored.

Delivery platforms have put forward constructive proposals to enable riders to work flexibly with additional security and have warned that forced reclassification will lead to less work for riders, will hurt the restaurant sector and will restrict the areas where platforms can operate. Unfortunately these messages have also been overlooked.

Nothing has been finalised and we will continue to argue that the Government should provide riders with flexibility and security, which is what they want. We will continue to engage with the Spanish Government to seek alternative ways forward. We urge the Government to listen to riders and urgently think again.”

Glovo declined to make a statement at this time.

In recent weeks, Uber has been lobbying for deregulation for platform workers in Europe ahead of the EU’s consultation process on improving gig work — seeing the possibility of a pan-EU framework as an opportunity to reshape regional employment rules to better mesh with modern working patterns. However the move has led to criticism that it’s trying to lower EU standards.

 

#deliveroo, #delivery-platforms, #europe, #gig-work, #glovo, #policy, #spain, #ubereats

Spain’s ten-year plan to put startups in the economic driving seat

Spain is preparing to push forward with pro-startup legislation, having recently unveiled a big and bold transformation plan with the headline goal, by 2030, of turning the country into ‘Spain Entrepreneurial Nation’, as the slightly clumsy English translation has it.

Prime minister Pedro Sanchez took a turn on Web Summit’s stage in December to announce the introduction of the forthcoming Startup Act — and to trumpet a new role, a high commissioner, tasked with bringing off a nationwide entrepreneurial economic transformation by working with all the relevant government ministries.

The broad-brush goals for the strategy are to increase growth in startup investments; attract and retain talent; promote scalability; and inject innovation into the public sector so it can bolster and support Spain’s digital development.

The aforementioned Startup Act is the first piece of dedicated legislation for the sector — and is intended to simplify starting up in Spain, as well as bringing in tax concessions and incentives for foreign investments. So it will be something of a milestone.

Chat to local founders and there’s a litany of administrative, tax-based and fundraising pain-points they’ll quickly point to as frustrations. Wider issues seem more cultural; startups not thinking big enough, investors lacking the necessary appetite for risk, and even — among wider society — some latent suspicion of entrepreneurs. While Spain-based investors are champing at the bit for administrative reform and better stock options. Moving the needle on all that is the Spanish government’s self-appointed mission for the foreseeable future.

TechCrunch spoke to Francisco Polo, Spain’s high commissioner overseeing delivery of the entrepreneurial strategy, to get the inside track on the plan to grow the startup ecosystem and find out which bits entrepreneurs are likely to see in action first.

“The high commissioner for Spain entrepreneurial nation is a new body that’s within the presidency. So for the first time we have an institution that, from the presidency, is able to help coordinate the different ministries on one single thing: Creating the first national mission. In this case this nation mission has the goal to turn Spain into the entrepreneurial nation with the greatest social impact in history,” says Polo.

“What we do is that work of coordination with all the ministries. Basically we have a set of internal objectives. First is what we call impacts — different sets of measures that is contained in the Spain entrepreneurial nation strategy. We also work trying to get everyone together on this national mission so we work on different alliances.

“Finally, we are also very focused on helping let the people know that Spain has made a decision to become — by 2030 — this entrepreneurial nation that is going to leave no one behind. So that’s our job.”

Scaling up on the shoulders of giants

The southern European nation doesn’t attract the same level of startup investment as some of its near neighbors, including the UK, France and Germany. But in some ways Spain punches above its regional weight — with major cities like Barcelona and Madrid routinely ranked as highly attractive locations for founders, owing to relatively low costs and the pull of a Mediterranean lifestyle.

Spanish cities’ urban density, high levels of youth unemployment and a sociable culture that’s eagerly embraced digital chatter makes an attractive test-bed for consumer-facing app-based businesses — one that’s demonstrated disruptive potential over the past decade+, in the wake of the 2008 financial crisis which hit the country hard.

Local startups that have gained global attention over this period — for velocity of growth and level of ambition, at the least — include the likes of Badi, Cabify, Glovo, Jobandtalent, Red Points, Sherpa.ai, TravelPerk, Typeform and Wallapop, to name a few.

Spain’s left-leaning coalition government is now looking to pick up the startup baton in earnest, to drive a broader pro-digital shift in the economy and production base — but in a way that’s socially inclusive. The shift will be based on “an ironclad principle that we leave no one behind”, said Sanchez in December.

For this reason the slate of policy measures Sanchez’s government has distilled as necessary to support and grow the ecosystem — following a long period of consultation with private and public stakeholders — pays close attention to social impact. Hence the parallel goal of tackling a variety of gaps (territorial, gender, socio-economic, generational and so on) that might otherwise be exacerbated by a more single-minded rush to accelerate the size of the digital sector.

“We are a new generation of young people in government. I think in our generation we don’t understand creating a new innovation system or a new industrial-economic system if we are not also talking about its social impact,” says Polo. “That’s why at the basis of the model we have also designed inclusion policies. So all this strategy is aimed at closing the gender gap, the territorial gap, the socio-economic gap and the generational gap. So at the end of the day, by 2030, we have created the entrepreneurial nation with the highest social impact in history.”

There’s money on the table too: Spain will be routing a portion of the ‘Next Generation EU‘ coronavirus recovery funding it receives from the pan-EU pot into this ‘entrepreneurial’ push.

“Specifically, for 2021, the budget assigned to the different goals of the strategy — we have more than €1.5BN for the main measures that we want to start setting up. And for the period 2023 it’s over €4.5BN dedicated to the rest of the measures. So basically between 2021 and 2023 we will be setting the basis/foundations of the Spain entrepreneurial nation,” says Polo.

Execution of the strategy will be down to the relevant ministries of government — who will be enacting projects and passing legislation, as needed — but Polo’s department is there to “guide and accompany” the various arms and branches of government on that journey; aka “to help make things happen” with a startup hat on.

The national strategy envisages entrepreneurship/startup innovation as the driving force at the top of a pyramid that sits atop existing sectors of the Spanish economy — “spearheading the innovative system that we want to generate”, as Polo puts it. “We are not only focusing on innovative entrepreneurship. We are also trying to create virtuous cycles between this ecosystem and the actual driving sectors of the Spanish economy — that’s why we listed a set of ten driving sectors that represent above 60% of the GDP. And this is of utmost importance.”

The listed sectors where the government wants to concentrate and foster support — so those same sectors can leverage gains through closer working with digital innovation are: Industry; Tourism and culture; Mobility; Health; Construction and materials; Energy and ecological transition; Banking and finance; Digitalization and telecommunications; Agri-food; and Biotechnology.

“We decided we needed to make the cut at some point and we decided that putting together 60% of the GDP in Spain was a clear direction of the sectors that we could be using in order to accelerate the change that we want to see,” says Polo. “Basically what we want to shift with this model is that the innovative entrepreneurship that has been quite enclosed in the past starts working with the different driving sectors that we have in the country because they can help each other solve their different issues.

“So first, for example, for investment — what if big companies start investing more and more than they are actually doing? We accelerate also that path — into innovative entrepreneurship system. That is going to help close that gap… What if startups and scale ups in Spain work together with our international companies in order to attract and retain that talent? That is going to put us as a country in a better position.

“To me the best example is about scaling up: Because what is better than scaling up on the shoulders of giants? We have already a big number of international of world class companies that are in different markets so what is better than being able to scale up with a company that is already there, that has the knowledge and that can help you mature as a scale up in a shorter period of time. So there are a lot of virtuous cycles that we can generate and that’s why we wanted to make also a broad appeal to the different driving sectors. Because we want to let the country know that everyone is called to make this a reality.”

Lime scooters outside El Retiro Park in Madrid (Image credits: Natasha Lomas/TechCrunch)

Digital divides

Digital can itself divide, of course, as has been writ large during a global pandemic in which the development of children excluded from attending school in person can hinge on whether or not they have Internet access and computer literacy.

So the principle of entrepreneurial growth being predicated upon social inclusion looks like an important one — even if pulling off major industrial transformations which will necessitate a degree of retraining and upskilling in order to bring workers of all ages along the same path is clearly not going to be easy.

But the ten-year timeframe for ‘Spain Entrepreneurial Nation’ looks like a recognition that inclusion requires time.

The long term plan is also intended to address a common criticism of Spain’s politics being too short-termist, per Polo. “In Spain particularly it’s been a regular criticism that politics always look in the small term so this is proof that this government is also addressing the short term issues but also is preparing Spain for the future,” he says, adding: “We really believe that [presenting a long term vision is] a good thing and it’s an answer to that social demand.”

The country has also — over the last decade or so — gained a bit of a reputation for successfully challenging digital developments over specific societal impacts in Europe’s courts. Such as, in 2010, when a Spanish citizen challenged Google’s refusal to delist outdated information about him from its index — which led, in 2014, to Europe’s top court backing what’s colloquially referred to as the ‘right to be forgotten’.

Uber’s regulation-dodging was also successfully challenged by Spanish taxi associations — leading to a 2017 ruling at the highest level in Europe that Uber is a transport service (and therefore subject to local urban transport rules; not just a technology platform as the ride-hailing giant had sought to claim).

Anti-Uber (and anti-Cabify) strikes have, meanwhile, been a quasi-regular (and sometimes violent) feature of Spain’s streets — as the taxi industry has protested at a perceived lack of enforcement of the law against app-based rivals who are not competing fairly, as it sees it.

And while gig platforms (even homegrown European ones) tend to try to shrug off such protests as protectionist (and/or ‘anti-innovation’), they have oftentimes found themselves losing challenges to the legality of their models — including most recently in the UK Supreme Court (which just slapped down Uber’s classification of drivers/riders as self employed — meaning it’s liable for a slew of costs for associated benefits).

All of which is to say that the muscular sense of injustice that segments of Spanish society have willingly — and even viscerally — demonstrated when they feel unfair impacts flowing from shiny new tech tools should not be dismissed; rather it looks like people here have their finger on the pulse of what’s really important to them.

That may also explain why the government is so keen to ensure no one in Spain feels left behind as it unboxes a major packet of startup-friendly policies.

Among a package of some 50 support measures, the entrepreneurial strategy makes a reference to “smart regulation” and floats the idea of sandboxing for testing products publicly (i.e. without needing to worry about regulatory compliance first).

The idea of opening up sandboxing is popular with local gig platform Glovo. “I really believe this is key; allowing innovation to test products/services without having to go through regulatory nightmares to test. This would really drive innovation,” co-founder Sacha Michaud tells us. “This is working well in financial services but could be applied across a wide range of tech areas.”

Attracting more investment to Spain and improving stock options so that local companies can better compete to attract talent are other key priorities for him.

Michaud says he’s fully supportive of the government’s entrepreneurial strategy and the Startup Act, while not expecting immediate results on account of what he expects will be a long legislative process.

He’s less happy about the government’s in-train plan to regulate gig platforms, though — arguing that last-mile delivery is being unfairly singled out there. This reform, which is being worked on by the Ministry of Labor, has been driven by a number of legal challenges to platforms’ employment classifications of gig workers in recent years — including a loss last year for Glovo in Spain’s Supreme Court.

“In Glovo’s case [the government] are specifically looking at regulating only riders, last-mile delivery platforms — yet still allowing over an estimated 500,000 autonomous workers in logistics, services and installations to continue,” says Michaud, dubbing this “very discriminatory; affecting literally a handful of tech companies and ‘protecting’ the status quo of the traditional IBEX35 Spanish companies”.

Asked about progress on the reform of the labor law Polo says only that work is continuing. “I don’t have more transparency on the work they are doing. I have probably the same information that you have and the conversations that we have with the different companies, also the gig companies that we keep an open dialogue with,” he says.

But when pressed on whether reforming regulations to take account of tech-driven changes to how people work is an important component of the wider entrepreneurial strategy he also emphasizes that the “ultimate goal” of the national transformation plan is “to generate more and better jobs”.

“We are always inclined to try to foster the companies that generate these better and increasing new jobs,” says Polo. “And I’m sure that the different gig companies that we have in Spain — I know that they understand this ultimate goal. They understand the benefits for the company and for the country of following this path and that they are willing to transform and evolve as the country is also evolving.”

At the time of writing Barcelona is also being rocked by street protests over the jailing of rapper, Pablo Hasél, over certain social media postings — including tweets criticising police brutality — judged, by Spanish courts, to have violated its criminal code around glorifying terrorism.

Spain’s laws in this area have long been denounced as draconian and disproportionate. Including by Amnesty International — which called Hasél’s imprisonment “an excessive and disproportionate restriction on his freedom of expression”. But Polo dismisses the idea that there’s any contradiction in Spain seeking to rebrand itself as a modernizing, pro-entrepreneur nation at the same time as Spain’s courts are putting people in prison over the contents of their tweets. (Hasél is not the only artist or citizen to fall foul of this law — which has also been infamously triggered by social media jokes).

“There’s no opposition of concepts at all,” Polo argues. “Spain is one of the most robust democracies in the world and that is something that is not us who are saying it — it’s the international rankings. And we have a rule of law. And in this case it’s a very clear case of someone who went across the limits that are established in legislation because the freedom of speech has limits of the rights of other people so it’s something that has nothing to do unfortunately with freedom of speech… The reason why Pablo Hasél is in jail is because he promoted terrorism.”

Pressed further on how ‘jail time for tweets’ might look to an international audience, he reiterates a recent government statement that they do intend to reform the penal code. “There are very specific things that, yes, we want to reform. Because times have advanced,” he says, adding: “We are a more mature country than the one we were in the 1980s. And there are specific things that we want to change in the penal code — but they have nothing to do with the recent events.”

Graffiti in a Barcelona street protesting against the imprisonment of rapper, Pablo Hasél, for crimes involving freedom of speech (Image credit: Natasha Lomas/TechCrunch)

Measures to change mindsets

On the broader issue of cultural challenge — aka: how to change a national mindset to be more entrepreneurial — Polo expresses confidence in his mission. He says it’s about making sure people see the big picture and their place in the vision of the future you’re presenting to them; so they see you’re actively working to bring them along for the ride.

“This is one of the things that I feel confident about. Particularly based on my background prior to being in politics. That is helping change mindsets,” he tells TechCrunch. “In the past I was able to help tonnes of people realize that they were capable of doing things that they thought they were never capable of doing. My understanding is that in order to generate those cultural changes you need to do one thing first: That is generating a vision for the future.

“That’s why we insist so much that by 2030 Spain is going to become an entrepreneurial nation with the greatest social impact in history and that we have a plan for that… Where we take the entrepreneurship and we help them spearhead this new innovation model. We leverage all the driving sectors of the economy so we are actually building on success; on the actual success of Spain as an international economy. And that there’s something for you in that plan. That’s why we are including in the strategy at the basis of the strategy the inclusion policies in order to close the gender gap, the territorial gap, the socio-economic gap, the generational gap.

“In order to change cultures you need align people into working together towards building something that is greater than themselves and I think that with the Spain entrepreneurial nation strategy we made that first step. And this is why — and this is a parenthesis — that’s why we say the [startup] law is as important as having this strategy.”

That startup law — due to be presented shortly in draft (aka as an anteproyecto de ley) for approval by the Council of Ministers, before going to parliament for a wider debate process (and potential amendments) — is the first piece of legislation aligned with the wider strategy. It also looks set to be one of its first deliverables.

Although it’s not clear how long it will be before Spain gets its shiny new startup law. (The country’s politics has lacked consensus for years; Sanchez’s ‘progressive coalition’ was only put together after he tried and failed to get a full majority for his Spanish Socialist Workers’ Party (PSOE) twice in a row.)

“That’s something that is difficult to say because there are laws that have a shorter and others that have a longer period of approval,” says Polo, on the timeframe for passing the legislation. “For us the important issue here is that the startup law has a full process — so it has a full agreement on every side of the hill so it becomes robust and stable legislation for the years to come.”

This “long awaited” regulation which the ecosystem has been calling for for “years”, per Polo, will address a number of different issues — from the first legal “definition” of startup (to reflect differentiation vs other types of companies); to measures to help startups retain and attract talent.

“We need to reform stock options so that they become a tool in order to compete internationally for talent,” he says, noting that the idea is to enable Spain to compete with regimes already offered by countries elsewhere in Europe, such as the UK, France and Germany.

“Also we need to reform VISAs in order to again retain and attract that talent,” he continues. “The president also talked about incentivizing investment and having a certain degree of tax breaks — and we understand that business angels need more incentives. So we have a more ordain and logical system of investment at the pre-seed and seed stage. And many other actions — it’s the Ministry of Economy that will end up with the final text that will be passed in the Council of Ministers in the coming weeks.”

Polo cautions that the law won’t instantly fix every gripe of founders and investors in Spain. Clearly it’s going to be a marathon, not a sprint.

“That’s why we have a strategy,” he emphasizes. “I understand the interest in the startup law but I always say that as important as the startup law is the Spain entrepreneurial nation strategy. Because it’s in there where we address the big problems that we have as a country when it comes to the ecosystem. And in there we have pointed out four big challenges that we have.

“First is investment. We need to accelerate the velocity of maturity of the investment in Spain… The numbers have been growing, year after year, and they look really good. So what we want to do is to help accelerate those numbers so we are able to run faster and close the gap that we have between us and our neighbours: Basically Germany and France. That they have 4x or 5x the number of investment that we have in Spain. We really want to be in ten years in a place where Spain could be leading the investment in innovative entrepreneurship in mainland Europe.

“Second challenge: Talent. We know that in order to build the entrepreneurial nation we need all the talent that we have. So we need to develop the internal talent but we also need to attract international talent and we need to retain that talent. So that’s why we were talking about the different tools that might be included in the startup law.

“The third challenge is scaling up. We in Spain have a lot of companies that assimilate success to selling. And that’s great — it’s totally legitimate. But what we need as a country is to have an increasing percentage of companies in the future that do not think about selling as a synonym of success; but they think about buying other startups around the world. Of growing. Of scaling up. So they started building today the big companies that in the future by 2030 they will generate thousands of good quality jobs in Spain which is the ultimate goal and the bottom line of the strategy.

“And the fourth goal: Turn the political administration into an entrepreneurial administration. Meaning that the political administration, it’s more agile. That we generate a positive benchmark. And that sometimes the public sector makes the investment that not even the riskier of venture capital funds can do. Because that’s the role of the public sector; to generate this kind of visions and to put the means in in order to achieve those. So among all the challenges that we have in the ecosystem it’s something we have put together in the strategy — that is going to addressed not only with one law but with 50 different measures that we included in the Spain entrepreneurial nation strategy.”

The wider entrepreneur strategy talks about nine priority actions to be developed in the next two years via certain projects — which Polo envisages being accelerated in the near term with the help of EU coronavirus recovery funds.

He highlights a couple of priority projects: One to create a network to link entrepreneurs and policymakers with the wider ecosystem, and another to connect incubators and accelerators to build out a national support network for founders — both of which have been inspired by approaches taken in other European countries.

“Among these projects we have one — Oficina Nacional de Emprendimiento — which is deeply inspired by La French Tech in France. So we want to generate a one-stop-shop for entrepreneurs, investors and the rest of the ecosystem to access all of opportunities of collaboration between the central government, regions and CP councils in order to improve entrepreneurship in their respective areas,” says Polo.

“We have other projects like Renace — which is an acronym for Red Nacional de Centros de Emprendimiento — and in there we’ve also been inspired by the network that Portugal has that are doing such exciting things. So what we want to do is help connect the different incubators and accelerators and venture builders that we have in Spain. So they’re at first connected and we add more value — but with one particular focus: The different gaps.

“With Renace in particular we want to help close the territorial gap. Because it’s going to be very interesting to be able to work with engineers in Cáceres for a company that is based in Barcelona. Or to work with a team of designers from the Basque country for a company that is setting up in Malaga. With Renace we can help integrate the country and really talk about an entrepreneurial nation and not just cities. So Spain has the potential to build that. And there are many others issues.”

France alone spends billions annually both on R&D and on direct support for the digital sector. And even with EU funding Spain can’t hope to match the level of ‘ecosystem’ spend of richer, northern European countries. But Polo says the plan is to make the most of what it has with the resources it can marshal — hence, with the Renace project, it’s about linking up existing incubators/accelerators (and adding “a new layer of value” such as via public-private partnerships).

“When you end up reading the Spain entrepreneurial strategy you realize it’s not a billionaire plan of money that you put on the table in order to start building this Spain entrepreneurial nation,” he says. “It’s instead it’s a very robust plan in order to create that vision and putting together the different pieces that we already have — the different assets that we have as a country to start working together intelligently so we can make the best of everything that we can.”

Polo also argues that Spain is already doing well on the startup cluster front — saying it stands alone with Germany in having more than one city ranked among the top ten ‘most entrepreneurial’ in Europe, per such listings. More recently, he says, Spain has risen further up these listicles — as more of its cities have popped up in the “global competition for innovative entrepreneurship”.

“Meaning that in different places of Spain there are many cities and regions that have the hunger to become a place that is helping entrepreneurs to create this kind of economy. And we can get many more,” he suggests, pointing to Renace‘s hoped for value from a social inclusion angle.

“With Renace what we want to do is generate this network and add more value — provide services, get into public-private partnership in order to add the value of the different places that we have in the country. So let’s say that a company in Barcelona can find tonnes of engineers in a city like Cáceres. The company in Barcelona becomes more competitive because the salaries in Cáceres — if you pay them the best salary in Cáceres they could be two-thirds of the salary in Barcelona. So the company in Barcelona becomes more competitive. But also the engineers in the city of Cáceres who want to stay in the region, who want to stay with their family or to have a life-project in Cáceres they can stay. So this is an example of how we can close the territorial gap and also become really integrated startup nation in the full term of nation.”

“The ultimate goal of the Spain entrepreneurial nation strategy is turning Spain into a country that is able to avoid the effects of different crises. And particularly the effects of that we saw in 2008 when the most vulnerable jobs were destroyed overnight — and they were counted by tens of thousands. That particularly struck the young people with unemployment rates that were above 55%. The immigrants and the people over 50. We don’t want that to happen again. So there’s been a very profound reflection on what needed to happen in Spain for that to change. And the conclusion was that we needed to change the productive basis of the country,” he continues.

“That’s why we are putting together a strategy that is going to help the innovative entrepreneurship sector spearhead these new models, this new economic model for Spain. That is going to be leveraging the different driving sectors of the economy — those ten sectors that we state in the strategy — and that as it could not be differently in a 21st century strategy, and particularly a strategy designed by a new generation of politicians and trying to respond to the ambitions of the new generations that is a strategy that is not including the social impact of this phenomenon. So that’s why we are also focused on putting together inclusion policies.”

Polo won’t be drawn into naming any especially promising startups he’s encountered on his travels around Spain — referring instead to the “tonnes of super innovative companies” he says he’s sure will soon be disrupting business as usual in Spain and (the government hopes) internationally — from battery charging companies to retail disruptors working on new ways to make clothes. (“Different kinds of innovations that people can’t imagine,” is his pithy shorthand.)

“What we are trying to do every time we have an opportunity is to also promote the knowledge of these companies — and also help Spanish people and also people abroad — to know that we have everything that we need in order to succeed as a nation and become that entrepreneurial nation with the greatest social impact in history,” he adds, acknowledging that a big part of his mission is “to tell the rest of the world that we are here”.

 

#digital-policy, #europe, #francisco-polo, #glovo, #policy, #spain, #startup-regulation, #startups, #tc

This Week in Apps: TikTok viral hit breaks Spotify records, inauguration boosts news app installs, judge rules against Parler

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry is as hot as ever, with a record 218 billion downloads and $143 billion in global consumer spend in 2020.

Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This week, we’re looking into how President Biden’s inauguration impacted news apps, the latest in the Parler lawsuit, and how TikTok’s app continues to shape culture, among other things.

Top Stories

Judge says Amazon doesn’t have to host Parler on AWS

logos for AWS (Amazon Web Services) and Parler

Logos for AWS (Amazon Web Services) and Parler. Image Credits: TechCrunch

U.S. District Judge Barbara Rothstein in Seattle this week ruled that Amazon won’t be required to restore access to web services to Parler. As you may recall, Parler sued Amazon for booting it from AWS’ infrastructure, effectively forcing it offline. Like Apple and Google before it, Amazon had decided that the calls for violence that were being spread on Parler violated its terms of service. It also said that Parler showed an “unwillingness and inability” to remove dangerous posts that called for the rape, torture and assassination of politicians, tech executives and many others, the AP reported.

Amazon’s decision shouldn’t have been a surprise for Parler. Amazon had reported 98 examples of Parler posts that incited violence over the past several weeks before its decision. It told Parler these were clear violations of the terms of service.

Parler’s lawsuit against Amazon, however, went on to claim breach of contract and even made antitrust allegations.

The judge shot down Parler’s claims that Amazon and Twitter were colluding over the decision to kick the app off AWS. Parler’s claims over breach of contract were denied, too, as the contract had never said Amazon had to give Parler 30 days to fix things. (Not to mention the fact that Parler breached the contract on its side, too.) It also said Parler had fallen short in demonstrating the need for an injunction to restore access to Amazon’s web services.

The ruling only blocks Parler from forcing Amazon to again host it as the lawsuit proceeds, but is not the final ruling in the overall case, which is continuing.

TikTok drives another pop song to No. 1 on Billboard charts, breaks Spotify’s record

@livbedumb♬ drivers license – Olivia Rodrigo

We already knew TikTok was playing a large role in influencing music charts and listening behavior. For example, Billboard last year noted how TikTok drove hits from Sony artists like Doja Cat (“Say So”) and 24kGoldn (“Mood”), and helped Sony discover new talent. Columbia also signed viral TikTok artists like Lil Nas X, Powfu, StaySolidRocky, Jawsh 685, Arizona Zervas and 24kGoldn. Meanwhile, Nielsen has said that no other app had helped break more songs in 2020 than TikTok.

This month, we’ve witnessed yet another example of this phenomenon. Olivia Rodrigo, the 17-year-old star of Disney+’s “High School Musical: The Musical: the Series” released her latest song, “Drivers License” on January 8. The pop ballad and breakup anthem is believed to be referencing the actress’ relationship with co-star Joshua Bassett, which gave the song even more appeal to fans.

Upon its release the song was heavily streamed by TikTok users, which helped make it an overnight sensation of sorts. According to a report by The WSJ, Billboard counted 76.1 million streams and 38,000 downloads in the U.S. during the week of its release. It also made a historic debut at No. 1 on the Hot 100, becoming the first smash hit of 2021.

On January 11, “Drivers License” broke Spotify’s record for most streams per day (for a non-holiday song) with 15.17 million global streams. On TikTok, meanwhile, the number of videos featuring the song and the views they received doubled every day, The WSJ said.

Charli D’Amelio’s dance to it on the app has now generated 5 million “Likes” across nearly 33 million views, as of the time of writing.

@charlidamelio♬ drivers license – Olivia Rodrigo

Of course, other TikTok hits have broken out in the past, too — even reaching No. 1 like “Blinding Lights” (The Weeknd) and “Mood” (24kGoldn). But the success of “Drivers License” may be in part due to the way it focuses on a subject that’s more relevant to TikTok’s young, teenage user base. It talks about first loves and being dumped for the other girl. And its title and opening refer to a time many adults have forgotten: the momentous day when you get your driver’s license. It’s highly relatable to the TikTok crowd who fully embraced it and made it a hit.

Weekly News

Platforms: Apple

  • Apple stops signing iOS 12.5, making iOS 12.5.1 the only versions of iOS available to older devices.
  • A report claims Apple’s iOS 15 update will cut support for devices with an A9 chip, like the iPhone 6, iPhone 6s Plus and the original iPhone SE.
  • New analysis estimates Apple’s upcoming iOS privacy changes will cause a roughly 7% revenue hit for Facebook in Q2. The revenue hit will continue in following quarters and will be “material.”

Platforms: Google

  • Google adds “trending” icons to the Play Store. New arrow icons appeared in the Top Charts tab, which indicate whether an app’s downloads are trending up or down, in terms of popularity. This could provide an early signal about those that may still be rising in the charts or beginning to fall out of favor, despite their current high position.
  • Google appears to be working on a Restricted Networking mode for Android 12. The mode, discovered by XDA Developers digging in the Android Open Source Project, would disable network access for all third-party apps.

Gaming

  • Goama (or Go Games) introduced a way for developers to integrate social games into their apps, which was showcased at CES. The company focuses on Asia and Latin America and has more than 15 partners, including GCash and Rappi, for digital payments and communications.
  • Fortnite maker Epic Games is getting into movies. The animated feature film Gilgamesh will use Epic’s Unreal Engine technology to tell the story of the king-turned-deity. The movie is not an in-house project, but rather is financed through Epic’s $100M MegaGrants fund.

Augmented Reality

  • Patents around Apple’s AR and VR efforts describe how a system could be identified in a way that’s similar to FaceID, then either permitted or denied the ability to change their appearance in the game.
  • Pinterest launches AR try-on for eyeshadow in its mobile app using Lens technology and ModiFace data. The app already offered AR try-on for lipsticks.

Entertainment

  • The CW app became the No. 1 app on the App Store this week, topping TikTok, Instagram and YouTube, thanks to CW’s season premieres of Batwoman, All American, Riverdale and Nancy Drew.
  • Users of podcasting app Anchor, owned by Spotify, say the app isn’t bringing them any sponsorship opportunities, as promised, beyond those from Spotify and Anchor itself.
  • YouTube launches hashtag landing pages on the web and in its mobile app. The pages are accessible when you click hashtags on YouTube, not via search, and weirdly rank the “best” videos through some inscrutable algorithm.
  • Apple’s Podcasts app adds a new editorial feature, Apple Podcasts Spotlight, meant to increase podcast listening by showcasing the best podcasts as selected by Apple editors.

E-commerce

  • WeChat facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs” in 2020. The figure is more than double that of 2019.

Fintech

  • Douyin, the Chinese version of TikTok, launched an e-wallet, Douyin Pay. The wallet will supplement the existing payment options, Alipay and WeChat Pay, and will help to support the Douyin app’s growing e-commerce business.
  • Neobank Monzo founder Tom Blomfield left the startup, saying he struggled during the pandemic. “I think [for] a lot of people in the world…going through a pandemic, going through lockdown and the isolation involved in that has an impact on people’s mental health,” he told TechCrunch.
  • New estimates indicate about 50% of the iPhone user base (or 507 million users) now use Apple Pay. 
  • Samsung’s newest phones drop support for MST, which emulates a mag stripe at terminals that don’t support NFC.

Social

  • Indian messaging app, StickerChat, owned by Hike, is shutting down. Founder Kavin Bharti Mittal said India will never have a homegrown messenger unless it bars Western companies from its market. Hike pivoted this month to virtual social apps, Vibe and Rush, which it believes have more potential.
  • Instagram head Adam Mosseri, in a Verge podcast, said he’s not happy with Reels so far, and how he feels most people probably don’t understand the difference between Instagram video and IGTV. He says the social network needs to simplify and consolidate ideas.
  • Facebook and Instagram improve their accessibility features. The apps’ AI-generated image captions now offer far more details about who or what is in the photos, thanks to improvements in image recognition systems.
  • TikTok launches a Q&A feature that lets creators respond to fan questions using text or videos. The feature, rolled out to select creators with more than 10,000 followers, makes it easier to see all the questions in one place.

Health & Fitness

  • Health and fitness app spending jumped 70% last year in Europe to record $544 million, a Sensor Tower report says. The year-over-year increase is far larger than 2019, when growth was just 37.2%. COVID-19 played a large role in this shift as people turned to fitness apps instead of gyms to stay in shape.

Government & Policy

  • Biden’s inauguration boosted installs of U.S. news apps up to 170%, Sensor Tower reported. CNN was the biggest mover, climbing 530 positions to reach No. 41 on the App Store, and up 170% in terms of downloads. News Break was the second highest, climbing 13 positions to No. 65. Right-wing outlet Newsmax climbed 43 spots to reach No. 108. In 2020, the top news apps were: News Break (23.7 million installs); SmartNews (9 million); CNN (5 million); and Fox News (4 million). This month, however, News Break saw 1.2 million installs, followed by Newsmax with about 863,000 installs, the report said.
  • Ireland’s Data Protection Commission (DPC) sent a draft decision to fellow EU Data Protection Authorities over the WhatsApp-Facebook data sharing policy. This means a decision on the matter is coming closer to a resolution in terms of what standards of transparency is required by WhatsApp.
  • German app developer Florian Mueller of FOSS Patents filed a complaint with the EU, U.S. DOJ and other antitrust watchdogs around the world over Apple and Google’s rejection of his COVID-related mobile game. Both stores had policies to only approve official COVID-19 apps from health authorities. Mueller renamed the game Viral Days and removed references to the novel coronavirus to get the app approved. However, he still feels the stores’ rules are holding back innovation.

Productivity

  • Basecamp’s Hey, which famously fought back against Apple’s App Store rules over IAP last year, has launched a business-focused platform, Hey for Work, expected to be public in Q1. The app has more App Store ratings than rival Superhuman, a report found. Currently, Hey has a 4.7-star rating across 3.3K reviews; Superhuman has 3.9 rating across only 274 reviews.

Trends

  • Baby boomers are increasingly using apps. Baby boomers/Gen Xers in the U.S. spent 30% more time year-over-year in their most used apps, App Annie reports. That’s a larger increase than either Millennials or Gen Z, at 18% and 16%, respectively.

Funding and M&A

  • Curtsy, a clothing resale app for Gen Z women, raised an $11 million Series A led by Index Ventures. The app tackles some of the problems with online resale by sending shipping supplies and labels to sellers, and by making the marketplace accessible to new and casual sellers.
  • Storytelling platform Wattpad acquired by South Korea’s Naver for $600 million. The reading apps whose stories have turned into book and Netflix hits will be incorporated into Naver’s publishing platform Webtoon.
  • On-demand delivery app Glovo partnered with Swiss-based real estate firm, Stoneweg, which is investing €100 million in building and refurbishing real estate in key markets to build out Glovo’s network of “dark stores.”
  • Pocket Casts app is up for sale. The podcast app was acquired nearly three years ago by a public radio consortium of top podcast producers (NPR, WNYC Studios, WBEZ Chicago and This American Life). The owners have now agreed to sell the app, which posted a net loss in 2020. (NPR’s share of the loss was over $800,000.)
  • Travel app Maps.me raised $50 million in a round led by Alameda Research. The funding will go toward the launch of a multi-currency wallet. Cryptocurrency lender Genesis Capital and institutional cryptocurrency firm CMS Holdings also participated in the round, Coindesk reported.
  • Bangalore-based hyperlocal delivery app Dunzo raised $40 million in a round that included investment from Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada and Alteria.
  • London-based food delivery app Deliveroo raised $180 million in new funding from existing investors, led by Durable Capital Partners and Fidelity Management, valuing the business at more than $7 billion.
  • Dating Group acquired Swiss startup Once, a dating app that sends one match per day, for $18 million.

Downloads

Bodyguard

Image Credits: Bodyguard

A French content moderation app called Bodyguard, detailed here by TechCrunch, has brought its service to the English-speaking market. The app allows you to choose the level of content moderation you want to see on top social networks, like Twitter, YouTube, Instagram and Twitch. You can choose to hide toxic content across a range of categories, like insults, body shaming, moral harassment, sexual harassment, racism and homophobia and indicate whether the content is a low or high priority to block.

Beeper

Image Credits: Beeper

Pebble’s founder and current YC Partner Eric Migicovsky has launched a new app, Beeper, that aims to centralize in one interface 15 different chat apps, including iMessage. The app relies on an open-source federated, encrypted messaging protocol called Matrix that uses “bridges” to connect to the various networks to move the messages. However, iMessage support is more wonky, as the company actually ships you an old iPhone to make the connection to the network. But this system allows you to access Beeper on non-Apple devices, the company says. The app is slowly onboarding new users due to initial demand. The app works across MacOS, Windows, Linux‍, iOS and Android and charges $10/mo for the service.

 

#actress, #adam-mosseri, #alipay, #alteria, #amazon, #amazon-web-services, #android, #app-developer, #app-store, #apple, #apps, #arkansas, #asia, #bangalore, #biden, #bodyguard, #columbia, #computing, #data-protection-commission, #dating-group, #disney, #doj, #driver, #durable-capital-partners, #e-commerce, #epic-games, #eric-migicovsky, #europe, #european-union, #fidelity-management, #food, #fox-news, #glovo, #google, #hana-financial-investment, #india, #instagram, #iphone, #ireland, #itunes, #judge, #latin-america, #linux, #london, #macos, #microsoft-windows, #mobile, #mobile-app, #mobile-applications, #mobile-devices, #netflix, #operating-systems, #parler, #pinterest, #play-store, #president, #real-estate, #seattle, #sensor-tower, #social-network, #social-networks, #software, #sony, #south-korea, #spotify, #stoneweg, #superhuman, #this-american-life, #tiktok, #tom-blomfield, #twitch, #twitter, #united-states, #wattpad, #web-services, #wnyc

Spain’s Glovo inks real-estate tie-up to add more dark stores for speedy urban delivery

Spain’s Glovo, an on-demand delivery app, has announced a strategic partnership with Swiss-based real estate firm, Stoneweg.

The deal will see the latter invest €100M in building and refurbishing “prime city real estate” in some of Glovo’s key markets as the delivery app works to build out its network of dark stores and sign up more retail partners for its urban delivery service, it said today.

The initial focus for the partnership will be on growing its dark stores network in Spain, Italy, Portugal, Romania, with additional countries slated as under review in Europe.

“These are the countries in which both Glovo and Stoneweg have a major presence, and therefore are able to move much quicker when it comes to setting up,” a Glovo spokeswoman told us. “However, the deal is not limited to these countries. Glovo’s aim is to grow and strengthen their Q-Commerce and dark kitchens infrastructure across Eastern Europe too.”

Glovo currently operates 18 dark stores globally — in cities including Barcelona, Madrid, Lisbon and Milan — but said it’s now looking to open similar stores in Valencia, Rome, Porto and Bucharest, among others.

It wants to have 100 dark stores up and running by the end of 2021, it added.

Last September the startup announced the sale of its LatAm ops to food-delivery focused rival Delivery Hero for $272M — leaving it more fully focused on Southern and Eastern Europe.

Then in November it announced the launch of a dedicated business unit to support expansion of the sub-30 minute urban delivery service, which it calls ‘Q-Commerce’ (that’s ‘Q’ for quick) — saying it would accelerate development of a b2b offering to stock third parties’ products in its city center warehouses (and have them delivered to shoppers via the couriers doing gig work on its platform).

Glovo said today that the Stoneweg strategic partnership will help it step on the gas to grow the infrastructure and fulfilment centers it needs to underpin this b2b offering.

The ‘deliver anything’ app is spying an opportunity to capitalize on the coronavirus’ impact on traditional bricks-and-mortar retail — betting urban consumers will make a permanent shift to outsourcing grocery and other convenience/essential shops to an app which bundles high speed delivery, rather than making such trips in person.

Its dialled-up focus on Q-Commerce is a direct response to “changing consumer sentiment and demand for instant and same-day delivery”, it added.

To date, Glovo’s platform has delivered more than 12 million multi-category orders globally, while in 2020 it experienced a growth rate of more than 300% year-on-year.

As well as supermarkets such as Carrefour, Continente, and Kaufland, Glovo’s list of retail partners includes the likes of Unilever, Nestle and L’Oréal, and IKEA — so it’s by no means focused purely on groceries.

It has said it wants Q-Commerce to power delivery of a wide range of products — from toys, music, books, flowers and beauty products to pharmacy items and groceries. And even, in some markets, a curated selected of IKEA wares — i.e. stuff that’s small enough to fit in couriers’ backpacks.

Commenting on the Stoneweg strategic investment in a statement, Oscar Pierre, co-founder and CEO, said: “We believe that the third-generation of commerce is already upon us. Following the close of Stoneweg’s investment, we are consolidating our strategic commitment to Q-Commerce, which will allow us to better connect people with a wide variety of available products in their cities.

“In the wake of COVID-19, we believe that dark stores represent the future of post-pandemic retail, and I think we’ll see a permanent shift in consumer habits towards same-day and instant delivery. We’re excited to continue to expand our offering, so that all types of businesses, from local independent stores to multi-national chains, can reach more and more customers thanks to new technological solutions and highly efficient infrastructure.”

In another supporting statement, Stoneweg’s Joaquín Castellví, founding partner and head of acquisitions for Europe, added that the strategic investment represents “an opportunity to offer our clients to diversify into a new class of retail asset through consolidated cities where Glovo operates — in a segment with great growth potential, accelerated by the situation we are experiencing”.

Glovo’s push to take a margin on a broad range of urban retail comes at a time when consolidation is eating into the thin margin food delivery space.

It is also facing legal challenges to its business model in Europe over the classification of couriers as self-employed — losing a supreme court ruling in its home market last September.

Ministers in Spain are working on a new regulatory framework for delivery apps and Glovo has said it’s awaiting that reform before making any changes but a lot will be riding on the detail.

UK-based Deliveroo also recently lost a legal challenge in Spain over the classification of its couriers. A court in Barcelona found last week that the company had falsely defined 748 riders as self employed, following a 2018 workplace inspection.

The delivery platform which competes with Glovo in the on-demand food and grocery space, announced Sunday the closing of a Series H funding round — raising $180M+ from existing investors, led by Durable Capital Partners LP and Fidelity Management & Research Company LLC, which it said valued the business at over $7BN.

The investment would enable Deliveroo to continue investing in “developing the best proposition for consumers, riders and restaurants”, it said, noting that it would be expanding in on-demand grocery following “rapid” growth over the last year.

Deliveroo added that the Series H investment comes ahead of a “potential” IPO — and said it “reflects strong demand from existing shareholders to invest in the company, given the significant growth potential in the online food delivery sector in which consumer adoption is accelerating”.

#apps, #dark-stores, #deliveroo, #europe, #glovo, #on-demand-delivery, #stoneweg

On-demand delivery app Glovo is spinning up a b2b logistics unit for super speedy urban delivery

Spain’s on-demand delivery app, Glovo, is gearing up to be able to deliver a much wider range of products within a 30-minute timeframe by rolling out a b2b logistics play — drawing on a network of city centre warehouses that it plans to massively expand over the next twelve months.

It’s just announced the launch of a new business unit, called Q-Commerce — the ‘Q’ standing for quick — to accelerate development of a b2b service that will see it offer to stock third parties’ products in its warehouses and have the couriers that operate on its on-demand platform make deliveries for other businesses too — offering what it bills as a “turn-key” logistics solution for businesses of all sizes to underpin their own online stories. 

It is already working with retail brands like Unilever, Nestle and L’Oreal and supermarkets including Walmart, Carrefour and Kaufland to stock and sell their goods from its network of so-called ‘dark stores’ — which are currently located in Barcelona, Madrid, Lisbon and Milan — offering users there speedy delivery for selected groceries and other items under its ‘Glovo Market’ brand (currently with the carrot of free 24-hour delivery and no minimum spend). But it’s aiming to ramp up across the board — expanding the reach of its Glovo Market offer to more cities and launching a b2b offer to power others’ online stores — saying it plans to have more than 100 dark stores up and running by the end of 2021.

Commenting in a statement, Daniel Alonso, global director of Q-Commerce at Glovo — and former ecommerce director at Walmart — said: “With shops closing down and lockdowns globally, consumers now want and expect more items than ever to be delivered to their doorstep. With this has brought new demands — it is no longer a case of waiting 24-48 hours for a delivery. Rather, the expectation for this is now a matter of minutes. At Glovo we’re committed to thirty minutes or less with all products available on Q-Commerce. As we continue to expand our enhanced offering, we’re excited to launch Q-Commerce in other parts of Spain and the rest of Europe, Eastern Europe and Africa over the next 12 months.”

Glovo says it wants Q-Commerce to power delivery of a wide range of products — not just meals and food from restaurants and supermarkets but anything sold in toy, music, book, flower, beauty and pharmacy stores.

There are some obvious gaps in that list: Clothes and shoe stores, for example, which are more likely to have their own online shopping infrastructure already. Plus clothes shopping is also more complex — given the propensity for returns when items don’t fit or suit. But it looks like Glovo is going after almost everything else.

It says its Glovo Market service has more than 50,000 active users, at this point — touting the delivery of around two orders every minute. It also says it’s delivered more than 12 million “multi-category” orders globally to date, while in Spain the number of orders for grocery items doubled this year to more than 1 million. Its overall growth rate in 2019 was more than 300% year-on-year, it added.

The Deliveroo and Uber Eats rival has always touted itself as a ‘deliver everything’ app because it offers the option for users to request anything (within bike-able reason) be brought to your door by one of its gigging couriers, even though the majority of the business involves biking fast food around cities.

Meal deliveries were making up three-quarters of its revenues at the start of this year — but Glovo has ambitions to beat Amazon at the urban convenience game of delivering all sorts of stuff really, really fast. And it’s got investors on board with the plan. Last year it raised a $169M Series D and a $166M Series E in quick succession.

It’s further beefed up its balance sheet this (pandemic) year by offloading its LatAm ops — selling them to European rival Delivery Hero for $272M — which means it’s concentrating its market focus on Southern and Eastern Europe (it also has a small footprint in sub-Saharan Africa, in Kenya and Ivory Coast).

Presumably it sees that footprint as a better fit for the ‘get stuff now’ convenience push it’s making with Q-Commerce combined with a network of its own city center warehouses (aka dark stores). Though last year it also said it wanted to work on building a path toward profitability over the next year+ so fierce competition in LatAm may have pushed those markets out of reach.

Glovo says it has more than 9 million monthly active users, at this point — and 55,000 “associated partners” globally; aka the gig workers who do the heavy lifting of making actual deliveries for its platform.

The startup is facing ongoing legal uncertainty in its home market over its classification of ‘glovers’ (as it calls couriers) as ‘self-employed’. Spain’s supreme court recently found a rider to be in a laboural relationship with the platform — and any move to force the business to reclassify the thousands of couriers it relies upon in the country would radically rework its push for profitability, to put it mildly.

#amazon, #ecommerce, #europe, #food, #glovo, #logistics, #on-demand-delivery

Spain’s top court rejects Glovo’s classification of couriers as self-employed

Glovo, a Spain-based delivery platform startup, is facing legal disruption in its home market after the country’s Supreme Court ruled against its classification of delivery couriers as ‘autonomous’ (i.e. self employed) — finding riders are instead in a laboural relationship with the platform.

It’s the latest in a string of legal rulings around the classification of Glovo riders in the country in recent years, some of which it has won. Although more recently momentum has been in the opposite direction, with a High Court decision late last year that also judged riders to be workers.

Today the country’s Supreme Court also refused to refer a preliminary question to Europe’s top court, arguing the defining characteristics of its contracts with riders concur, so it’s not clear where Glovo’s appeal can go next. A second ground for appeal was rejected for a formal compliance reason, per a judiciary press release (in Spanish).

In the PR — ahead of the release of the full judgement — the judiciary branch writes that the Plenary of the Fourth Chamber of the Supreme Court maintains Glovo is “not a mere intermediary in the contracting of services between businesses and distributors”.

“It is a company that provides delivery and courier services, setting the essential conditions for the provision of said service. And it is the owner of the essential assets to carry out the activity. For this, it uses delivery people who do not have their own and autonomous business organization, who provide their service inserted in the employer’s work organization,” it adds (via Google Translate). 

We’ve reached out to Glovo with questions about how it intends to respond to the ruling.

In a statement reported by El Mundo it has called for policymakers to update regulation around gig worker platforms, writing: “Glovo respects the judgment of the Supreme Court and awaits the definition of an adequate regulatory framework by the Government and Europe.”

At the EU level, the bloc’s lawmakers have signalled an awareness of concerns about conditions for gig workers.

Setting out an ‘Agenda‘ for her five year term late last year, Commission president Ursula von der Leyen said she would look at ways of improving the labour conditions of platform workers — although her suggested policy focus was a pretty soft one, of “skills and education”. So Europe’s courts may end up doing the heavy lifting on gig worker rights.

One key question is how viable is the ‘on-demand delivery’ model if the full cost of labor moves onto the balance sheet? It would certainly change the unit economics in markets where platforms can’t legally sidestep the costs of employing the thousands of humans they rely on to move packets around. (Hence some of these startups are shelling out on R&D to replace human riders with delivery drones/robots.)

In Glovo’s case, the company was in the news last week after it announced the sale (for $272M) of its LatAm business to German rival Delivery Hero — further concentrating its operations in the European market, after it exited the Middle East at the start of this year.

Last year it told us it was focused on trying to achieve profitability in 2021. Any such push would be complicated by requirements to reclassify large numbers of delivery riders as workers. So the Supreme Court ruling looks like it could have major implications for Glovo’s business.

#collaborative-consumption, #delivery-apps, #gig-platforms, #gig-worker-rights, #glovo, #lawsuit, #spain

Delivery Hero picks up Glovo’s LatAm ops for $272M in latest food delivery consolidation

More consolidation in the thin-margin food delivery space: Delivery Hero has announced it’s buying the LatinAm operations of Glovo, a Spanish on-demand delivery app. The German company said today that it’s paying up to €230 million to take over eight markets, including a €60M performance-based earn-out.

The transaction, which Berlin-based Delivery Hero said it expects to close within a few weeks, will cover all of the Latin American countries where Glovo operates — namely: Argentina, Peru, Ecuador, Panama, Costa Rica, Honduras, Guatemala and the Dominican Republic.

Glovo had already pulled out of two LatAm markets at the start of this year, saying then that it was focused on markets where it could grow and establish itself among the top two delivery players. It exited the Middle East at the same time.

Offloading its LatAm operations to Delivery Hero now will leave it with 14 markets — and a fuller focus on Southern and Eastern Europe.

The move isn’t a huge surprise, given ongoing questions over profitability in the thin-margin delivery space.

Last December Glovo told us it was focused on trying to reach profitability “in a little over a year’s time”. That essentially means winning the race with competitors to be the dominant platform where you’re operating, and only operating in cities where the unit economics stack up, so — ideally — where you can nudge users to make high volumes of repeat orders.

Still, in December 2019 Glovo’s co-founder also told us it was expecting its LatAm business to be operationally profitable this year. But perhaps challenges related to the coronavirus pandemic have pushed it to narrow its focus.

There are also SoftBank’s billions to contend with. The Japanese tech investor has a $2BN fund aimed at Central and South American — as well as making multiple investments in on-demand delivery startup which have been duking it out for share in the region. The cost of competing in the region was likely rising and that wouldn’t help Glovo’s push for profitability.

Commenting on the sale in a statement, Glovo CEO, Oscar Pierre, said: “We feel that it’s important to focus on key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers.”

“This deal will allow us to strengthen our presence in those markets where we are already very strong, while also allowing us to invest in new markets where we see huge growth potential and opportunity. We truly believe that Delivery Hero is the best possible partner to take the business we’ve built in Latin America to the next level. They have everything it takes to go on and become the leading player in the region,” he added.

The sale means Delivery Hero will add five new markets to its LatAm footprint, as well as removing a competitor in three markets where the two have been directly competing (Argentina, Panama and the Dominican Republic).

In these three overlapping markets it will take over Glovo’s businesses directly, on the closing of the transaction. Glovo will continue to operate the other businesses until March 2021, they added.

The transaction is also subject to fulfilment of certain conditions and relevant regulatory approvals.

In a statement Niklas Östberg, CEO and co-founder of Delivery Hero, said LatAm offers “exceptional growth potential” for his veteran food delivery business — which only two years ago sold its operations in its home market of Germany to another rival, Takeaway.com. (So, yes, the food delivery space really is a sizzling stir-fry of deals as players jockey for position and — they hope — profitability…)

“Latin America is a region with exceptional growth potential for online delivery. Acquiring Glovo’s local operations gives us the opportunity to double down on our efforts to drive innovation, continuously improve customer experience and support local vendors in the region. We have been working closely with Glovo for many years, and are proud to incorporate their Latin American services into our global network,” Östberg said.

Back in August Delivery Hero also went shopping on the grocery delivery front picking up Dubai-based InstaShop. Grocery delivery has risen up the agenda during the coronavirus crisis, as food delivery app users have found themselves with more time at home than usual.

Glovo also bills itself as ‘more than food delivery’ — with a button in the app where users can request delivery of ‘anything’ (or at least anything one of its couriers can manage on a bike or moped to them).

#apps, #delivery-hero, #exit, #food-delivery-apps, #glovo, #latam, #startups

Uber Eats beefs up its grocery delivery offer as COVID-19 lockdowns continue

Uber Eats has beefed up grocery delivery options in three markets hard hit by the coronavirus.

Uber’s food delivery division said today it’s inked a partnership with supermarket giant Carrefour in France to provide Parisians with 30 minute home delivery on a range of grocery products, including everyday foods, toiletries and cleaning products.

The service is starting with 15 stores in the city, with Uber Eats saying it plans to scale it out rapidly nationwide “in the coming weeks”.

In Spain it’s partnered with the Galp service station brand to offer a grocery delivery service that consists of basic foods, over the counter medicines, beverages and cleaning products in 15 cities across the following 8 provinces: Badajoz, Barcelona, Cádiz, Córdoba, Madrid, Málaga, Palma de Mallorca and Valencia.

Uber Eats said there will be an initial 25 Galp convenience stores participating. The service will not only be offered via the Uber Eats app but also by phone for those without access to a smartphone or Internet.

The third market it’s inked deals in is Brazil, where Uber said it’s partnering with a range of pharmacies, convenience stores and pet shops in Sao Paulo to offer home delivery on basic supplies.

“Over the counter medicines will be available from the Pague Menos chain of pharmacies, grocery products from Shell Select convenience stores and pet supplies from Cobasi — one of the largest pet shop chains in the country,” it said. “The new services will be available on the Uber Eats app, with plans to launch in other Brazil states and cities in the coming weeks.”

The grocery tie-ups are not Uber Eats’ first such deals. The company had already inked partnerships with a supermarket in Australia (Coles) and the Costcutter brand in the UK, where around 600 independent convenience stores are offered via its app.

Uber Eats also lets independent convenience stores in countries around the world self listed on its app. However the latest tie-ups put more branded meat on the bone of its grocery offer in Europe and LatAm — with the Carrefour tie-up in France marking its first partnership with a major supermarket in Europe.

It’s worth noting Spain’s food delivery rival, Glovo, has an existing grocery-delivery partnership with the French supermarket giant in markets including its home country — which likely explains why Uber Eats has opted for a different partner in Spain.

Asked whether it’s looking to further expand grocery deliveries in other markets hit by the public health emergency Uber Eats told us it’s exploring opportunities to partner with more supermarkets, convenience stores and other retailers around the world.

As part of its response to the threat posed by the COVID-19 pandemic, the company has switched all deliveries to contactless by default — with orders left at the door or as instructed by a user.

It also told us it’s providing drivers and delivery people with access to hand sanitiser, gloves and disinfectant wipes, as soon as they become available. And said it’s dispensing guidance to users of its apps on hygiene best practice and limiting the spread of the virus.

Uber Eats has previously said it will provide 14 days of financial support for drivers and delivery people who get diagnosed with COVID-19 or are personally placed in quarantine by a public health authority due to their risk of spreading the virus, with the amount based on their average earnings over the last six months or less.

The policy is due for review on April 6.

#apps, #australia, #barcelona, #brazil, #carrefour, #collaborative-consumption, #coronavirus, #covid-19, #europe, #food, #food-delivery, #france, #glovo, #grocery-store, #madrid, #online-food-ordering, #retailers, #sao-paulo, #shell, #spain, #supermarkets, #uber, #uber-eats, #united-kingdom, #valencia