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Contxto – Safety concerns continue to thwart home delivery startups from fully operating in Buenos Aires. A judge recently put companies such as Rappi, Glovo and PedidosYa out of operation until they implement minimum security precautions for delivery drivers, whether they be on bicycle or motorcycle.
Feel the burn
This past weekend, Judge Roberto Gallardo from Buenos Aires’ Contentious Administrative and Tax Court Number 2 suspended operations for these three home delivery companies.
From his perspective, improved road safety is the primary motivation behind Law 5526. Specifically, it was created to “prevent the occurrence of preventable accidents, which will lead to the life or physical integrity of the distribution employees.”
Moreover, Gallardo has gone as far as to ask the city police to halt illegal shipments. He has even asked credit card companies such as MasterCard, Visa, American Express and Orange Card to block transactions for preventative measures.
Legacy of concerns
Various countries have especially complained about Rappi operations based on how the drivers allegedly work in precarious conditions. Unions are also another source of major opposition. Some Rappi drivers in nearby Cordoba have even organized their own guild to boycott the company.
Common complaints from these parties range from lack of work benefits, health insurance or other provisions. At least in Argentina, companies are responsible for providing these amenities to employees.
Adding fuel to the fire is the recent death of 20-year-old Ramiro Cayola. A truck ran over the young off-duty Rappi delivery driver in the Argentine capital while riding his bicycle. Although Cayola was reportedly not working at the time, the concern for bikers’ safety continues to consume city authorities.
Other recent events involved a 63-year-old Rappi driver who was hit during a pizza run. Outrage on social media ensued when the customer asked “How is the order?” despite the employee notifying the user that he had an accident.
What are the implications?
For here on out, any company calling themselves a “platform” must satisfy new requirements imposed over seven months ago but not yet fully implemented. Per law, these mandates involve helmet use, proper night-time clothing, proper vehicle storage, in addition to proof of health and work insurance
According to the recent legislation, companies must provide this equipment to workers rather than requiring employees to purchase them.
“It is expressly forbidden to the aforementioned companies to force employees to pay the established provisions,” said the ruling.
These startups have allegedly known about these new safety expectations for the past seven months. Based on the amount of time they have had to alter operations, consequences will be severe if violated.
“Upon expiration of the period of 60 calendar days planned, any company that is not duly registered and complying with each and every one of the terms of Law 5526 must be closed and/or disabled ex officio,” said judge Carlos Balbín.
Illegal deliveries will reportedly result in confiscation of products and fines of 10,000 Argentine pesos for each infraction. Police figures report that 77 percent of delivery workers use backpacks instead of carrying it securely on their bicycles. A further 67 percent don’t use helmets while 70 percent don’t own insurance.
“The decision harms both distributors and businesses and consumers,” said Rappi in a response.
“We express our concern about this ruling that harms both distributors, local businesses and consumers, and we deeply regret that judicial decision, which will be appealed. With the same commitment as always, we will continue to look after the interests of all parties.”
Following this recent news, the affected companies are already trying to make amends with authorities. For example, Rappi started distributing free equipment to workers over the weekend such as helmets, vests and brochures involving insurance plans.
“What we are looking for is to raise awareness about road safety to the deliverymen,” said one of the people distributing.
Additionally, the Ministry of Transportation and Transit reportedly intends to appeal the recent ruling.