Food delivery startup, Tu Orden, to formalize ties with 1,000 couriers

Rappi is the most famous food delivery app from Colombia.
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Contxto – Colombian logistics startup Tu Orden is taking a different approach when it comes to its food delivery app. Unlike other platforms like Uber Eats or Rappi, it wants to legally treat its couriers as employees.

Correspondingly, Tu Orden announced it will add 1,000 couriers to its payroll by the end of September. They’ll also receive all the social benefits the law in Colombia specifies.

Among the startup’s other plans, it’s looking to raise an investment with parties that share its vision.

The food delivery dilemma explained

Food delivery platforms have faced criticism in recent months. For one, that the fees they charge restaurants are too steep and eat away at businesses’ (especially small ones) profits. 

Secondly, couriers have been protesting to demand better work conditions. They state that demand has risen but platforms’ pricing schemes leave them with a low income despite long hours of work.

Couple that with a high risk of exposure to Covid-19, and it’s a recipe for disaster.

Platforms have sympathized with their claims but are unyielding towards them. They argue that their business model is designed to treat couriers as independent partners, not employees. 

If they granted benefits like health care to every deliverer on their platform, they state profit margins would be severed.

Another alternative is to transfer this expense onto business partners and/or end users. But this approach has also been viewed as impractical. 

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Restaurants have already stated their nonconformity with current rates. Meanwhile, request volumes may tank if an app user has to pay a significantly larger amount for their meal to be delivered.

Forced to formalize

Given the thorniness of this issue… most governments in Latin America have been quite reluctant to take an official stand on the matter.

The closest example to some form of regulation was in December of last year when a judge ordered last-mile delivery startup Loggi to formalize its ties with its deliverers.

Other than that, it’s every courier for themself.

Related articles: Tech and startups from Colombia!


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