Bloomberg Línea — In a first-instance decision with potential implications for the so-called sharing economy, Uber (UBER) has been ordered to pay R$1 billion (about $205 million) in collective moral damages and to recognize the employment relationship of all its drivers in Brazil. The company has stated that it will appeal.
The judgment was delivered by the 4th Labor Court in São Paulo and is the result of a public civil action filed by the Labor Public Prosecutor’s Office in São Paulo (MPT-SP). The lawsuit initiated by MPT-SP began in November 2021 when the agency sought recognition of the employment relationship between Uber and its drivers.
During the investigation, the Prosecutor’s Office claimed to have evidence that allegedly demonstrated significant control exerted by the digital platform over the professionals’ activities, which, according to the ruling, constitutes an employment relationship.
Brazilian Judge Maurício Pereira Simões, the head of the 4th Labor Court in São Paulo who issued the judgment, stated that Uber’s level of control over its drivers is unparalleled compared to any known employment relationship to date.
The funds from the collective moral damages will be allocated, if the sentence is confirmed in higher instances and payment is made, mostly to the Workers’ Support Fund, with a smaller portion directed to driver association organizations.
Uber, on the other hand, announced it will appeal the decision and will not implement any of the measures mandated by the judgment until all applicable legal remedies have been exhausted.
The company argues that the decision creates legal uncertainty, as it contradicts previous rulings involving other app platforms such as iFood, 99, Loggi, and Lalamove.
Uber argued that the judgment did not adequately consider the body of evidence presented in the case and relied on doctrinal positions it deems outdated, going against decisions of the Supreme Federal Court.
The company also emphasized that there is currently no specific legislation regulating the work model intermediated by technology platforms in the country, which is being addressed by the federal government through Decree No. 11,513, which established a Working Group to develop proposals for regulating activities carried out through these platforms.