The first warning light came on in March, when the home delivery application Glovo decided to close its operations in Brazil, the main place in Latin America and the mecca of any startup that dreams of succeeding in the region."It is an extremely competitive market," the company simply pointed out, to explain the reason for the departure from a country where Uber Eats, iFood and Rappi dominate the delivery scene.
The second wake-up call came just a few days ago, when Glovo also decided to leave the Chilean market, where it competed head-to-head with PedidosYa and Rappi for the second place in a square where Uber Eats is the absolute leader.
The news resonated strongly in the Latin American digital ecosystem, even more so after learning that the app of Spanish origin had closed a round of financing for 150 million dollars to expand in South America.
Curiously, these funds were at the center of the "operational withdrawal" scene in Chile. And it led to an unprecedented paradox: how a disbursement to add its presence in the "neighborhood" ended with the abandonment of one of its main markets.
Strictly speaking, the German Delivery Hero, global leader in the delivery apps and owner of PedidosYa, was the cause of the fact that yellow backpacks no longer circulate in trans-Andean soil.In effect, that company (which owns a stake in Glovo) opted to block the operation and demanded that it retire from the positions in which PedidosYa holds the most dominance: Argentina, Chile and Egypt.
The Spanish app, part of the holding Maxi Mobility, decided to dispense with these last two countries and, in exchange, received the operations of PedidosYa in two others: Peru and Ecuador, under the brand Domicilios.com.
The barter not only was not very beneficial for Glovo, but also sowed the doubt: Will Glovo also dispense with its business in Argentina? The question is gaining strength because it is a complicated market for the apps of the "new economy", since they suffer complaints from the unions due to job insecurity.All or nothing?
At first glance, Glovo's horizon in Argentina does not seem threatened. Indeed, in the last hours the company made in Belgrano neighborhood, a few meters from its "headquarters" for the region, an event that worked as "harangue" of its partners. That is, the main restaurants that use the platform.The meeting also served for the presentation in society of Martín Rubino, a former Mercado Libre who took over two months ago as Country Manager of the company for Argentina and Uruguay.
"We want to be the app of the city," said the executive, quoting Óscar Pierre, one of Glovo's founders.
He was also in charge of announcing the numbers of the company in the country in order to convince about the business potential of the restaurants, fundamental partners of the platform:- More than 6,000 delivery people (or "Glovers")- 35% monthly increase in downloads- About 5 million orders in the 17 months it has been operating- Year-on-year growth of 16 times between January and May- Presence in 43 locations in Argentina
"We have to start maturing and grow more partners," said the executive, who said that 30% of consumers who use the platform are shared with rival applications, while the rest are "unique."
At this point, Rubino remarked that Glovo is the player with "more backpacks" in the city of Buenos Aires, with 49% of the market, against 27% of Rappi and 24% of PedidosYa, so the strategic plan aims to put many chips to Argentina.
"We are very responsible with the investors, we bet on the countries where we know we can win and that depends a lot on the context, in the case of Brazil, there was a local player with history and very well anchored. assets, "Rubino clarified to iProUP.
In this regard, he assured that the inclusion of Domicilios.com in the brand portfolio allowed the number of orders in Peru to surpass Argentina, achieving the first place in the region. "We are here to stay, we see a huge potential," he added in the face of doubts about the company's albiceleste operation.Expansion
The new country manager announced new application businesses with which they seek not only to increase the profitability of restaurants, but also to add new services to the consumer, in the context of fierce competition.
In the latter case, they launched Glovo Business, aimed at offering a service similar to that of the courier agencies, but using the distributors of the platform.
"There is a tariff that is established for each case, they will not generate a saving in the cost of the shipment, compared to the normal user's app, but their spirit is to speed up the operation and make it scalable," says Rubino.
In this case, it offers a monthly settlement instead of individual payment and access through an Application Programming Interface (API) for companies to integrate it into their systems and automate their processes.
For his part, according to the executive, "glovers can benefit because as several orders have additional delivery points they will gain in profitability". Rubino trusted iProUP exclusively that they are testing this service with Mercado Libre so that sellers can choose Glovo as a delivery provider.
Another initiative is Cook Room, a kind of coworking enabled in the city of Buenos Aires that gastronomic establishments can use to expand, either geographically or in quantity of orders.
It is a property in Villa Crespo -which the firm prefers not to reveal its location- in which the restaurants use some of their chefs to quickly reach the neighborhoods with the highest demand, such as Palermo, Caballito, Almagro, among others."The locals pay a commission on sales, more than a delivery, because we put our facilities and Glovo staff to oil orders," says Rubino.
In this way, the restaurants locate one or two people in the shifts where they have the highest demand. "It depends on the product they make, because there is a partner that produces bagels and their schedule is different from that of a hamburger joint," he told iProUP.Job
The legal framework of the distributors is one of the main polemics of controversy within the platform economy. Even labor lawyers do not agree.
"There is no 'collaborative' work in Argentine legislation, it is collaborative when it does not represent a normal or regular job and, in addition, it is not done for the same company," labor law expert Juan Carlos Cerutti tells iProup.
In this sense, the lawyer emphasizes that "we must analyze what to do with this model", because currently "it is an unregistered work relationship" and these companies "are in fraud with the current law". As an example, he says that "in Australia, France or England they understand it that way".On the opposite side, Solana de Diego, from De Diego & Asociados, remarks to iProUP that "it is not about workers in a dependency relationship but about self-employed who set their own hours, choose when to connect, what to order or refuse and they do not receive any type of disciplinary sanction. "
De Diego points out that there is no exclusivity of employment, another of the arguments put forward by the workers. "It's as if the taxi drivers who use the BA Taxi app are considered employees of the City Government," he says.
"Glovers are a fundamental part of this ecosystem, we use Monotributo, which adjusts in terms of regulation to the model that this platform demands and they demand, more than 60% work part-time, at the time and day they want. a rigid dependency relationship scheme, "Rubino told iProUP.
According to the executive, "Glovo would love a hybrid model in the short or medium term, combining flexibility with some additional protection." And he revealed that they are talking with the authorities in search of that scheme.
"It is an issue that we work with different levels of municipal government, in operational issues and road safety, and national, with the labor legislation.There is a demographic group that seeks that flexibility because it studies or has another job.We do not seek to impose an agenda, but to bring our voice to the table, "clarified Rubino.At this point, he agreed with the labor lawyers, who are asking that the current Labor Contract Law, dating from 1975, be modified.
"It is an agreed norm for a factory era in which a worker entered a company, worked 30 years in the same place and retired, you need legislation that protects the employee and takes into account the employer," says the lawyer Juan Martín Gallo.
Meanwhile, from the Trade Union Association of Motorcyclists Messengers and Services (ASiMM) claimed that the applications companies fall within the collective agreement, which establishes a remuneration of 24,000 per month for employees in the sector.
"It is not the same to distribute food as to deliver messages," claimed the union, which maintains the intake at the headquarters of PedidosYa and assured that "the conflict is permanent."From the union not only point against the companies for "breaking the law", but also criticize the Buenos Aires Executive because he appealed the ruling of judge Andrés Gallardo, which requires suspending delivery apps until the riders meet certain safety standards vial.
"Gallardo calls for compliance with the law 5,526, which modifies the Traffic Code and the Legislature voted unanimously." And they shoot: "The City Government thinks that we are Deportivo Reunion, they love doing work tables, they are inoperative in the Transportation Secretariat", they shoot from ASiMM.
For his part, Rubino said that the relationship with dealers is one of the differentials of the company. "It's based on two main legs: a team, which gives support in each city where we operate, administrative tools, payments, guidance and training, and we offer them a competitive income."
And he indicated that in addition to the 6,000 distributors, Glovo has 140 direct employees and became "support for the gastronomic industry, since the delivery represents up to 30% of its sales".
Another step that the company has in the pipeline is the creation of a development center, something that its main competitor also projects. And that will be an opportunity for technological startups after the enactment of the Law of Knowledge Economy.
"This is something that is under study, Glovo has been probing the idea of opening a second technology hub, because of my experience in Mercado Libre, it tends to be complex to have geographically dispersed development centers," Rubino told iProUP.
At this point, the executive remarked that "at some level, due to a need for growth", companies end up installing these innovation hubs. "At some point, we will have to take that step and Buenos Aires is on the top of the list of options," he adds.Does it stay?
The presentation of Rubino made it clear that the balance between Delivery Hero and Glovo for Argentina was twisted in favor of the yellow app. In effect, I name Buenos Aires as the "headquarter" of the region: half of the staff that works in the offices of Belgrano serve other markets in Latin America.It also showed that the public albiceleste is active user, although the service is still improvable, according to figures provided by the company:
- 74% of deliveries are made in 45 minutes or less
- The average is 38 minutes, against 35 'of Spain
The application has a good reception from the public. According to the company, the "average home" used by Glovo consists of a 33-year-old man and a 31-year-old woman who:
- They make six orders per month
- Four of those orders are gastronomic, mainly hamburgers and healthy food
- The two remaining correspond to supermarket, pharmacies or kiosks
- Your average ticket is $ 500
With more than 45 million invested, almost 50% of the delivery market and the arrival to more and more cities in the country, the local operation is safe from the shock wave that Glovo's withdrawal in Chile and Brazil supposes. And even Argentina could be the destination of the next investments of a holding company that is preparing to go public.
