Deliverers protest in front of Rappi’s headquarters

Contxto – Grin, Nubank and Rappi are like the popular kids on the block. Always the topic of everybody’s conversations. 

In Summary

Rappi is grabbing headlines, once again. This time, though, it isn’t as pretty. The recent backlash from its own deliverers, also known as “Rappitenderos,” has captured the media’s and entire ecosystem’s attention. In fact, Rappi’s alleged low-earnings and poor working benefits are something many people and governments have been complaining about for quite some time.

On July 4, an estimated 100 deliverers gathered in front of Rappi’s Bogota headquarters to protest against the company. The startup, which can hardly be called one at this point, is presumably not taking enough care of these people.

In turn, the deliverers started burning down the orange-branded backpacks and containers as gestures of unconformity. Specifically, these workers aren’t entitled to social security benefits in Colombia or most of Latin America.

Besides this, low earnings also triggered the demonstration. Similar events have transpired in Argentina with some Rappitenderos even trying to create their own union.

In-Depth

On average, Colombians Rappitenderos earn COL$4,700 per order, comprised of COL$3,700 from transactions plus a COL$1,000 tip. This equals US$1.5 per order, approximately.

During productive hours, they can make between two and three orders, earning between US$3 to US$5. Easy to see why their income depends on the number of orders and/or services they provide to users. Rappi issued a letter rejecting these complaints.

“We offer various channels including weekly focus groups, chat, Rappitendero houses, among others established and available as support for Rappitenderos,” said a company statement. “(Also, we have) attention centers in which we reply to questions and inquiries, and we establish a conversation about their priorities.”

This is a tough one, I must say. I’m also in the midst of determining my own stance, but with so many variables and nuances to consider, it is very hard to arrive at any conclusion.

It’s hard to take a side when both the good and bad of the situation are balancing each other out. Rappi is, in fact, taking a large share of each transaction. This is obviously controversial since so many people depend on Rappi for survival, yet they have no benefits or health insurance despite the inherently risky job. 

Much of this is due to legal loopholes preventing authorities from regulating Rappi. Since the workers don’t have any actual employer-employee relationship over the platform, they’re essentially freelance agents.

This is a tough situation, especially seeing the way many of these people are living. Now, by contrast, they may not have even had a job before Rappi came along.

Meaning, they’re doing these deliveries because a) it pays better than other jobs, b) it’s the only place where they can earn money with no specific skill set or c) other jobs were even more demanding or risky. 

I’m not even sure if Rappi’s objective was for people to work full-time as deliverers. At first, it was a way for part-timers, students or people with free time to earn an income or a little extra on the side. 

I can see both sides of the coin. Therefore, it is pretty difficult to come to a solid conclusion. You do the calculations yourself, do you think Rappi is taking advantage of these people and should it be prohibited?

Or do you think Rappi is actually enabling more people to earn a living, people that might have no opportunity otherwise?

Similarly, do you think it should be strictly regulated, causing uncertainty on the financial viability of the business post-regulation? Either way, this is certainly an interesting case for business ethics across the globe. Sit in groups of three and discuss.

-VC