Labor Unrest at Rappi?

Earlier this month, according to various eyewitness reports, around 100 independent Rappi delivery contractors burned their trademark orange merchandise totes in front of Rappi’s offices in the north of Bogotá.  Rappi delivery contractors are not employees but independent contractors. Still, the “Rappitenderos” as they are called, are demanding better working conditions, and occupational health coverage, such as if a delivery person—Rappitenderos often use bicycles or motorcycles to make deliveries—is injured in the course of his or her duties.

Rappi has taken off very strongly in Latin America since its founding in 2015, with a presence now in Colombia, Uruguay, Peru, Mexico, Costa Rica, Chile, Brasil and Argentina. The company, with major investments by Softbank, is valued at over $1 billion USD.

Rappi allegedly issued a statement (Finance Colombia has been unable to obtain it) denouncing categorically any act that disturbs public order or puts citizens at risk. On the other hand, the dispute is attracting political attention, with Colombian Senator Jorge Enrique Robledo tweeting (translated here) “We all know that the labor conditions of Rappi are so contrary to decent work as to offend human dignity. This is not how to construct a truly democratic country that we Colombians dream of. And Duque doesn’t do anything.”

It is important to point out that in Colombia, a country of relatively complex labor laws, it can be difficult to obtain formal employment, and the laws are such that formal part-time employment is impractical. For example, an employer would have to pay full time pension and health benefits to a student employee working 3 hours per day after school under Colombian law. The gig economy is creating opportunities for many Colombians—and also Venezuelan refugees—who otherwise would be unable to find a source of income.

That being the case, scenes of 20 or 30 Rappitenderos waiting on their next delivery to come across their smartphone are not uncommon in areas such as Bogotá’s Parque 93 or Medellín’s Parques de Laureles. As independent delivery workers, there is no minimum or guaranteed income, and pay is per delivery. A surplus of available delivery people means less work for each available Rappitendero.

So far the protest seems to be isolated however as Rappi grows and attracts the attention of the public, politicians, unions and regulators, the company’s navigation through these obstacles as it continues to grow will be key to its success.