Business & Economy

LatAm delivery services booming, but questions persist about labor conditions

Santiago, Feb 6 (EFE).- Digital transportation platforms like Rappi, Cornershop and Uber Eats expanded rapidly at the onset of the Covid-19 pandemic in Latin America’s biggest countries and are continuing to enjoy sustained growth, although that success is marred by questions about precarious working conditions, labor exploitation and inadequate legal protections.

In markets such as Chile, those on-demand delivery services became a source of income for thousands of undocumented migrants trapped in a bureaucratic maze while trying to obtain a visa and work permit.

That reality, however, makes them vulnerable to abuses by companies that capitalized on favorable market conditions and high Internet penetration rates to achieve booming sales volumes.

No official data is available on the total number of “riders” in Chile, but anyone spending a half hour observing a busy street is bound to see dozens of people on motorcycles or bicycles wearing backpacks bearing the logos of Cornershop, Pedidos Ya, Rappi and Uber Eats.

According to the latest Labor Ministry report, the number of couriers now amounts to around 300,000, 43 percent of whom are Chilean and the rest foreigners: mostly Venezuelans (42.5 percent), followed by Colombians (4.4 percent) and Peruvians (3.5 percent).

Most of the riders are men.

“In Chile, there are no official figures on numbers of workers because companies have been very guarded and because there’s a high rate of informality in the business,” Rodrigo Palomo, of the University of Talca, told Efe.

“The ‘riders’ have been organizing themselves,” he added, noting that Cornershop workers engaged in collective-bargaining negotiations with that Chilean platform (acquired in 2021 by Uber) in what was the first such process in that industry anywhere in the world.


In Brazil, which according to a study by Brazilian higher education institution and think tank Fundacao Getulio Vargas (FGV) makes up half of the on-demand delivery platform market in Latin America, the administration of recently inaugurated center-left President Luiz Inacio Lula da Silva says it will look to combat both the monopoly power of the leading provider and improve working conditions in that sector.

FGV says local operator iFood controls 80 percent of the Brazilian market, although that company suffered a major setback in 2020 when the Administrative Council for Economic Defense (CADE), Brazil’s national competition regulator, prohibited it from entering into new exclusivity contracts with restaurants after complaints were filed by Colombian company Rappi and Uber Eats.

The stakes are high, with the Brazilian Association of Bars and Restaurants (Abrasel) indicating that takeout orders amounted to $7 billion in 2021, or 20 percent of total revenues in that sector.

But although many jobs are available in on-demand delivery service in Brazil, working conditions for the estimated 1.5 million “micro-entrepreneurs” in that industry are precarious, according to figures from the Institute of Applied Economic Research (IPEA).

“It’s not possible that in 21st century Brazil someone has to work more than 14-16 hours to sometimes not even earn the minimum salary, and go for six or seven years without a raise,” Labor Minister Luiz Marinho said recently.


In Argentina, Pedidos Ya, a unit of Germany’s Delivery Hero, has a 76 percent market share, followed by Rappi (22 percent) and a dozen other companies.

“A lot of business owners in the gastronomy sector say (those companies gained a foothold) during the pandemic” and that now “it’s very difficult to turn back time” because they control the sales channels,” the head of legal framework and inspections at the ASMMS motorcycle couriers union, Gonzalo Ottaviano, told Efe.

The companies are not regulated at the state level, although Buenos Aires city requires these entities to provide accident insurance to drivers and prevents them from implementing incentive or penalty schemes that may increase road safety risks or sending notifications to couriers while they are making their deliveries.


Mexico ranks among the top 10 countries worldwide in e-commerce sales, with half the population buying foods and beverages through digital channels, according to the Mexican Online Sales Association.

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