Gig Economy Apps in Brazil Score Low for Decent Working Conditions: Study

One day after the Fairwork Brazil report was published, iFood announced readjustments increasing the rate of payment to its delivery drivers

Gig Economy Apps in Brazil Score Low for Decent Working Conditions: Study
March 18, 2022 | 04:31 PM

Brazil’s main delivery platforms fail to guarantee basic labor rights. These are the conclusions of the study Fairwork Brazil 2021, coordinated by the Oxford Internet Institute and WZB Berlin Social Science Centre, published on Thursday.

No gig economy Brazilian app scored more than two points in the evaluation of minimum standards of decent work. The maximum score was 10. It was the first time that Fairwork, carried out in 27 countries, analyzed the six largest delivery platforms in Brazil. The evaluation was based on remuneration, working conditions, contracts, management, and fair representation. Prosus-backed iFood and Didi Chuxing-owned 99 received two points, while Uber received one. Colombian unicorn Rappi, Brazil-listed GetNinjas, and UberEats did not score.

Chile and Ecuador had similar results to the Brazilian survey, with the highest score being 3. But, the Latin American results are worse than in Africa, Asia, and Europe, where there are platforms with higher scores, reaching seven, eight, and nine points.

PUBLICIDAD

Rafael Grohmann is the principal investigator for Fairwork Brazil. He explains that local platforms score better than multinationals. “Uber’s score in several countries is one or two points. It’s a global policy,” he said. According to Grohmann, companies that did not score mean that the research did not have enough evidence to prove compliance.

Also Read: Flying Off the Shelves: iFood Cleared for Delivery Drone Take-Off

“Our methodology involves interviews with workers, meetings with platforms, and desk research. There are cases that we contacted the platforms and didn’t get back to them,” he said, in an interview with Bloomberg Línea.

The study, which relies on a global network of researchers from several universities, kept UberEats in the research because it was done over 2021, while the platform’s food delivery operations were still active in the country. In Brazil, Unisinos conducted the research along with a team of academics.

PUBLICIDAD

Only 99 was able to demonstrate by a public statement that all its workers earn above the local minimum wage, which in 2021 was R$5.50 per hour or R$1,212 per month, according to the report.

Most platforms, according to the study, do not meet this basic threshold because they do not have a minimum pay or charge high commissions or fees. This means that the courier can work with deliveries through the app all month and still receive less than the minimum wage.

Fares and working hours are also highly volatile, leading to an income insecurity for workers, according to the report.

Two platforms (Uber and 99) were able to evidence actions for task-specific risk workers in line with Fairwork principles, such as the provision of personal protective equipment (PPE) and clear accident and health insurance policies.

On other platforms, if PPE was offered, many workers faced significant barriers to accessing it, for instance, because of the distant pick up point. Also according to the report, another recurring complaint from delivery workers was the lack of basic infrastructures such as access to toilets, rest areas, and drinking water. “Many workers face serious health risks from traffic accidents, assaults, excessive exposure to sunlight, back pain, stress, and mental suffering. Platforms need to do more to mitigate these risks,” the study says.

Also Read: iFood and Rappi Bid Farewell to Uber Eats in Brazil

PUBLICIDAD

Only iFood was able to evidence basic standards concerning fair contracts as a result of engagement with Fairwork, the report says. But most platforms still do not provide a contract that is communicated in clear, understandable, and accessible language to workers at all times, and do not notify deliverers of proposed changes within a reasonable timeframe, the research says.

No platform was able to prove that its contracts were free of unfair clauses and that they do not unreasonably exclude liability on the part of the platform.

The study also points out that no app was able to evidence effective communication channels, transparent appeals processes, and anti-discrimination policies.

According to Fairwork, only iFood was able to highlight basic policies by creating a Deliverers Forum as a communication channel with delivery leads. Most platforms, however, do not have a documented policy that recognizes the voice of the delivery person and workers’ organization, the research finds.

PUBLICIDAD

“Workers’ rights to freedom of association are often limited. Several workers report that they have already been penalized for participating in strikes,” the study says. The largest strike movement by delivery workers was in July 2020, in the so-called “Apps Strike”, organized by couriers from platforms such as iFood, Loggi, UberEats, and Rappi.

PUBLICIDAD

A day after the study was published, iFood announced that it is adjusting the minimum pay rate per delivery from R$5.41 to R$6 for its more than 200,000 delivery partners. The company also granted a 50% increase (from R$1 to R$1.50) per kilometer driven to mitigate losses related to the increase in fuel prices, but the initiative will be permanent. The adjustment will be valid for deliverers who use all means of transport and there will be no special criteria for eligibility. iFood said this is the third increase granted to delivery partners this year.

iFood

According to iFood, in November and January, the company launched an R$8 million fund to help offset successive fuel price increases in Brazil. To Bloomberg Línea, Roberto Gandolfo, iFood’s VP of Logistics and Restaurants, responded by email that “while there is a current reality that fuel prices are rising sharply around the world, the increase to delivery drivers is the result of an open and active dialogue between executives and delivery drivers to increase compensation and benefits for people seeking flexible work through iFood’s app and platform.”

Gandolfo says the decision to increase the earnings of delivery partners has more to do with the strategy of being the delivery drivers’ primary app than fuel price inflation.

PUBLICIDAD

The raise for couriers will come into effect on April 2. But, according to Gandolfo, even at current pay, iFood delivery drivers were already earning about four times Brazil’s minimum hourly wage. “We estimate that this will increase total earnings for our delivery partners by R$3.2 billion over the next 12 months,” he said.

Also Read: Rappi’s CEO: “Rappitenderos Earn More than Two Minimum Wages in Latam”

He also said that the latest Fairwork ranking shows that while the initiatives adopted by iFood position the company ahead of the industry, more needs to be done. “That is what we are doing today. Our team will meet with Fairwork in the coming days to hear their comments on the study and collect important inputs to further improve our policies in favor of delivery partners.”

PUBLICIDAD

The executive also said that in addition to recent readjustments, the company has created personal accident insurance, offering coverage for temporary injuries; built partnerships with establishments to create more than 1,400 support points; and advanced its relationship with deliverers, including the first forum with leaders in the delivery category. The meeting served as the basis for the construction of a Letter of Commitment from iFood to delivery partners on 15 December 2021.

In 2020, iFood’s operations generated about R$31.8 billion of Brazil’s GDP and 739,000 jobs, according to the platform. “iFood went further in the debate on increasing the equity and dignity of the workers of the platform and publicly defended the need for urgent construction of mechanisms that support the deliverers in the social security sphere, in line with the new work models that guarantee professional autonomy and flexibility of their time in the way they consider most appropriate to the activity and that, today, are abandoned by the current legislation,” said the VP.

According to Grohmann, now Fairwork begins the second round to evaluate companies this year and intends to expand the number of platforms evaluated. “The scenario is not inevitable. Even iFood and 99 have committed to making changes from the meetings with us.”

PUBLICIDAD

According to the investigator, the report looks at companies so that they are not one-off changes for image improvement, the so-called “fairwashing”.

“A lot of platforms, while they talk of being pro-citizenship, don’t pay attention to basic principles, and decent work is important for the very reputation of companies. A lot of it has been strategy and PR from companies. We want to see if the project is perennial or if it is something embryonic if nothing has been done yet. It’s an ongoing relationship.”

Uber

Through a statement, Uber said it believes it is necessary to advance mechanisms that improve the social protection of app workers so that these independent professionals can fully exercise their activity.

PUBLICIDAD

“In recent years, in dialogue with partner drivers, Uber has been implementing a series of measures in this direction.” The company acknowledged that “there is still much to advance”, but regretted that Fairwork Brazil has “ignored the facts on at least three principles, remuneration, management, and contracts”.

“Uber is the only platform to transparently display on its website information about partners’ average earnings according to city and number of hours online. Anyone can consult the data and even check details about the calculation methodology. The site points out that in the city of São Paulo, for example, partners who drive around 40 hours have earnings of about R$ 1,300 per week. The data is calculated based on the average earnings of partners in the last four weeks,” the company said.

According to Uber, the deactivation of partner driver accounts does not happen often, and Uber is the only platform to provide processes, including a portal, so that the partner can request a review of any decision they feel was wrong. The details and step-by-step of the review processes are reported on Uber’s website.

The platform also said that all partner drivers necessarily need to review the General Terms and Conditions when they register on the platform, the document always remains available for consultation, and when there is any update notice is sent for new mandatory review. “In addition, all the rules and policies of the platform, such as the Community Code or the account deactivation policy, are informed on Uber’s website,” says the press statement.

Rappi

Also via a statement, Rappi said it maintains a constant dialogue with delivery drivers and is permanently on the lookout for solutions that can favor them. “They are offered face-to-face service centers, real-time support, training courses, traffic safety bulletins, an emergency button for risky situations, insurance for personal accident, permanent disability and accidental death and two health care plans.”

The unicorn also said that it created a R$ 25 million fund for partner delivery drivers, as a way to guarantee increases in their earnings in the period June/2021 and Jan/2022, with the increase in gasoline among the main factors of this investment.

‘With this, it was possible to increase their earnings, by an average increase of 34% per order. Rappi has been working continuously to improve its services and remain an attractive ecosystem for delivery partners.

As for Fairwork’s report, Rappi recognizes the importance of the initiative, and will consider its findings to refine the initiatives it undertakes on behalf of partner deliverers.”

GetNinjas

GetNinjas, meanwhile, on the company’s executive level, said it was not consulted during the drafting of the Fairwork Brazil report to clarify the platform’s operating model that differs it from the other companies cited by the survey.

“We highlight that GetNinjas operates as online classifieds, in which service providers - which includes micro and small entrepreneurs - advertise their services and get new potential customers. In this way, professionals use the platform as an advertising channel to advertise services and negotiate with potential customers. The contact, negotiation, and payment of the service between the professional and the client are made outside the platform and, in this way, the providers define the price, time, and conditions of the service together with the client. Therefore, our business model is different from the others cited in the survey,” the company said in a statement. Bloomberg Línea contacted 99 but did not get a response.