Venezuelan migration and contract types are some of the factors that have Rappi in the eye of the storm
LatinAmerican Post | Juliana Suárez
Listen to this article
"This application (Rappi) has generated 'Rappitenderos' (as deliveryman or deliverywoman are called), income for more than 110 million dollars, this money allows people to pay for their university, housing, children's expenses ...", those were some of Simón Borrero's words, CEO and co-founder of Rappi at EXMA, a marketing event held in Bogotá in May 2019.
Leer en español: La interminable pelea de los Rappitenderos contra Rappi
These words form an encouraging image of what this technological giant is, and that has expanded throughout Latin America since it has allowed hundreds of thousands of citizens to work in a service in which they can generate an income.
The Colombian technology company became a success story and a clear example of exponential growth by expanding to seven countries in Latin America in less than five years. Simón Borrero was awarded at the beginning of 2019 as Entrepreneur of the Year by the Colombian newspaper La República, specialized in economics. This, among other things, to achieve a valuation of USD $1,000 in September 2018, making it the first technological unicorn of the country.
"Rappi continues to grow by 20% per month, which is undoubtedly a difficult growth to handle, but it's all part of an obsession with growth," said Borrero at EXMA. "It's a matter of getting millions of people out of poverty, something that suits us all."
Over time, his obsession of growing became a double-edged sword for the company and now they are beginning to see the consequences after the dissatisfaction of hundreds of 'Rappitenderos' who are asking for better working conditions: social security and pension or better pay in the delivery. The burning of their orange suitcases, the flagship color of the company, in front of Rappi's offices was the most reliable proof that the delivery people disagree to what Borrero said.
-The Rappi slogan should not be "We run for you," says Gilver, a 'Rappitendero' who comes from Venezuela, laughing, but, "We get rich thanks to you."
Gilver arrived a year and a half ago from Colombia fleeing his country and, like many other Venezuelans, found in Rappi a way to make money. In Venezuela, he had a marketing company, so the conversation begins by stating that he has an objective perspective on the incredible economic phenomenon that the company is.
-As a company, ha! I would have loved to thought about it before. They sell the idea to the 'Rappitendero' of "Be your own boss, work at the times you want". And with that speech, people already believe it. Then you realize that the company wins as an App, earns for the product, for advertising, for promotions and also, it keeps almost 80% of the delivery- says Gilver, praising the company from the business point of view, and condemning it from the worker's point of view.
Not having social security, a pension and regular payments are some things that 'Rappitenderos' like Gilver have complained about. These complaints, which has been in the focus of the media, have unleashed more and more questions about the functioning of the great Colombian unicorn.
Be your own boss
That fantasy of 'be your own boss' brings a small print that many may not notice until the day they begin to demand better conditions.
Following the burning of suitcases, Minister of Labor, Alicia Arango, said publicly that the contracts that Rappi handles are legal, and that, although sometimes they do not favor the 'Rappitenderos', in Colombia they are allowed, which states that the company is not committing anything illegal.
According to Arango, the 'Rappitendero' works with a type of independent contract, which has certain weak points that affect the worker, but that is not an informal contract.
However, Sonia Sanchez, a lawyer specialized in labor contracts, said that "actually the 'Rappitenderos' are informal, since the income they receive for the activity carried out does not form part of any tax control, while the independent workers have regulation in matters of social security and therefore a tax control can be exercised over them."
For there to be a labor contract, not necessarily independent but of any other type, the 'Rappitenderos' should have certain conditions:
"- The personal provision of a service, which in this case is the performance of a job by a natural person for another person, which may be natural or legal.
- The continued dependence or subordination. In this case, the worker is subordinated to a boss, must receive instructions and attend them
- The existence of a remuneration, which in this case is called salary and that is equivalent to the payment made by the employer to the worker for the work performed.
- In addition, compliance with a work schedule to perform a contracted work, for which access to remuneration must be given. "
In that sense, 'Being your own boss' means, that you do not have an employer and that these conditions will not be fulfilled. Thus, neither the 'Rappitendero' nor the platform or the company itself has certain obligations. Being your own boss and managing your hours also includes the fact that, by not having a work contract, social security is on his own account
The consumer takes over
"Actually Rappi does not generate a job as such, what it generates is an opportunity to do a job that achieves that people who have access to the application get some income, an activity that obviously is quite beneficial for the company," said the lawyer.
To put it in some way, Rappi ends up being a digital platform that connects a client (who is the Consumer) with a delivery person (called the Distributor). In this sense, Rappi is a bridge for the user to acquire a service (ranging from food to any other quantity of products).
In this way, the relationship or "mandate contract" exists in several ways. The Consumer with the Distributor, the Consumer with the Platform, the Distributor with the Platform, and all these also with the "Rappi Ally", which are the restaurants.
Each time you create an account on any platform or company, you are accepting Terms and Conditions, which you may never have read in your life. If we had the habit of reading it, from the beginning we would know that both the client and the 'Rappitendero' accept this relationship, in which the Distributor is working for the Consumer, only through a web service.
In one of its sections, the T&C says: "The Platform: is the web and managed applications by the Operator (the company itself), which allows the concurrence of Consumers and Distributors so that through mandate contracts, the Consumer requests the management of an order ".
Understanding this, there is no employer that must pay the expenses of the 'Rappitendero'. Similarly, in one the section that explains the role of the Distributor, states that it is a "natural person who agrees to perform the management of the order requested by the Consumer through the Platform, at their own risk".
Opportunity or opportunism?
-What would Rappi do if Venezuela was not in a crisis? -Asked a fellow 'Rappitendero', who is also a Venezuelan- They could not treat all Colombians like that because they would look for other ways out, but we do not have more options. Rappi is practically the only way out for Venezuelans to earn some money and send to our families.
It can be seen in two ways: on one hand, this technological unicorn has helped at least 1.3 million Venezuelans who are in Colombia, to find a job and not be on the streets of the country affecting the Colombians and the economy, among other things. But on the other hand, it can be seen as if the company was taking advantage of the situation because they know that even though they do not provide the optimum conditions, Venezuelans will continue working there, as is their only option.
No matter what the answer is, or if both have a bit of truth, hiring a foreign worker demands having his or her documents in order, with a work permit, etc. Otherwise, the employer would have to face some kind of sanction when violating the law.
But in this type of contracts, the situation is more difficult. Here "there is no work contract, there are no great possibilities to identify who develops the activity because it is done through an application, that is, practically anyone can do it, without the minimum requirements," says Sonia Sánchez. Due to this, it is not possible to verify if all the 'Rappitenderos' have the requirements to work so there is no visible breach, nor could it be ensured that Rappi is hiring illegals, as it is not hiring.
In this sense, the minister said that it is necessary that this type of work (although she referred to it as independent, and Sánchez as informal) be regulated so that it does not affect the workers and they can receive dignified conditions. In addition, with this model there is no possibility of control over migrants, and "much less is there any possibility of exercising tax control over them".
A change of model
Although there are no legal gaps in the modus operandi of the company, the demands of the 'Rappitenderos' are fundamental, even though they accept precisely those conditions when entering. Being that in Colombia this type of hiring is allowed, the company does not have the obligation to change. To do so, the hiring model should change completely, implying that the company sacrifices some of its income and allow "concrete and real intervention of the Ministry of Labor," says the lawyer.
This has sparked debate because, it would not only be the company that must change, but also the 'Rappitenderos' should demonstrate their legality. Here, two points have entered into the discussion to which they have a long way ahead. On one hand, informal work and independent contracts (not only in Rappi but throughout the country) to which minister Alicia Arango referred. On the other hand, resolving the migratory situation of the Venezuelans who are in Colombia.
When asking Gilver and his fellow worker, who did not want to give his name, what would they do to improve Rappi? Gilver's response was to improve the platform and the payment in the percentage of households.
For his fellow worker, on the other hand, the solution would be to put him in charge of being able to help the Venezuelans: "If I was the boss I would regulate the situation and have real contracts. When you go to training, you create a user and that's it. That's why it has been seen that there are delivery people who steal because there is no control. "He, however, is one of the hundreds of Venezuelan 'Rappitenderos' who do not have their immigration status in order.