Debate About Colombian Labor Reform’s Impact On Delivery Apps Heats Up

Tu Orden, a competitor of Rappi in the food delivery business, claims that the Colombian unicorn’s opposition to the reform that seeks to provide social security to drivers is “exaggerated”

In 2021, the Colombian startup ecosystem had 25,261 wmployees, 55.2% of which are concentrated in the logTech, finTech and retailTech sectors.
March 31, 2023 | 07:07 PM

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Bogotá — The labor reform proposed by the government of Colombian President Gustavo Petro has encountered fierce opposition within the mobile app industry, especially from delivery apps.

But contrary to the position of companies such as Rappi, one entrepreneur of the sector pointed out that it is possible to be profitable if the reform is approved, and questioned the numbers provided by Alianza In, the sector’s representative body, on the number of jobs that would allegedly be put at risk.

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“I do not understand why they do not give the numbers” to Rappi, Gabriel Calderón, CEO of delivery firm Tu Orden, said, and who, in addition to the delivery business, owns a food chain that decided to withdraw from the Colombian unicorn’s platform due to differences regarding the value of commissions.

“Let’s make a calculation. An average order is 40,000 pesos, they charge 25% commission, a service fee of 10% to the user plus a home address of 6,000 pesos on average and the income for an order is 20,000. pesos With that we reach the platforms to pay a domiciliary and carry out the operation without any problem,” he told Bloomberg Línea.


Contrary to the warnings of the association of digital platforms, the entrepreneur stressed that it is possible to be profitable after the adoption of the labor reform, which aims to formalize the apps’ workers, and considered the calculations of the possible impact on employment exaggerated.

According to Alianza In, if the labor reform is approved, 80,000 jobs would be at risk in Colombia.

In an interview with Bloomberg Línea, the Colombian Vice Minister of Labor Relations and Inspection, Edwin Palma Egea, said that the debate on the labor reform is appealing to "exaggeration as a strategy".dfd

According to figures from KPMG, in 2021 the Colombian innovation ecosystem had 25,261 workers, 55.2% of which are concentrated in the logtech, fintech and retailtech sectors.


“The reality is that adding Rappi, Didi, Mensajeros, Urbanos, Picap, Quick and Tu Orden delivery drivers, the number does not reach 20,000. And of those, 80% have that as their main job. So I don’t get Alianza In’s numbers, all the jobs can be recovered with the formalization of the sector,” Calderón said.

“The case is that a customer pays 6,000 pesos for a home delivery, and the delivery person was paid 3,000 pesos by the platform. And someone said this week that they paid half a billion pesos to deliverers in 2022 [referring to Rappi’s CEO, Simon Borrero]. The question is: how much did the delivery drivers take home? How much did the platform keep and how much did the delivery riders get? From what was left to the platform, it should have made out invoices to the delivery drivers, deducting that value and invoicing it as a commission that carries VAT, but where is that reported?”

He also referred to the statements made to Bloomberg Línea by Alianza In about delivery drivers not wanting to work a 5 a.m. to 8 p.m. schedule.

“No one wants to keep hours, no one wants to have a boss, we all want flexible schedules. It’s not just in this industry, it’s in all of them, but why should business leaders stop doing things right?

For this reason, he stated that the government must promote “decent work, that all people have a pension”, referring also to the case of Venezuelan citizens who work for such platforms.

“We all have a relative or an acquaintance who is between 60 and 80 years old and who does not have access to a pension, and survives on the family’s help or still works, when he/she should already have an assured income (...) Nowadays nobody wants to pay a pension, they think that they will never reach that age. The reality is that most of us will get there and we need to have a dignified old age,” he added.

In an interview with Bloomberg Línea, Colombian Vice Minister of Labor Relations Edwin Palma Egea said that the debate on the labor reform using “exaggeration as a strategy”.


“Exaggerating the impact of the reform - that is also strategic - to make it more edible before public opinion, but without going into the detail of it, article by article, of proposal by proposal. With that they simplify the debate,” he said.

He said the government is flexible nevertheless and that it is still fundamental to try to reach an agreement that facilitates the legislative process.

He added that the message the government wants to convey is that they have “no interest in destroying either the platform, or the system, or this way of working. What we want is to bring in labor rights that today are being taken away everywhere in the world”.

“We have said: the worker can connect at the hours he/she deems. The platform, the same technology, must help to calculate those hours of availability and convert them into social security contributions. This is allowed by the technology. The articles are clear,” he said.

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