Buenos Aires attempts to crack down on gig economy

Three food delivery companies in Argentina, Rappi, PedidosYa and Glovo, were ordered to have their platforms suspended by the regional government.

The authorities ordered Horacio Rodrígues Larreta, the mayor of Buenos Aires, to prohibit the activities of these three companies in the city until they comply with the regulations set out by the Transit and Transport Code.

However, judge Roberto Gallardo decided to go even further and ordered the immediate suspension of the apps that haven’t complied with the law.

He also ordered several card companies, including Visa and Mastercard, to immediately suspend and block all card operations with the three businesses in Buenos Aires.

The authorities also require that the delivery companies should provide, with no cost to employees: reflective clothing and helmet, a bag that complies with regulations, proof of personal insurance and more.

The judge also outlined that the three businesses could be sanctioned with a fine of 10,000 pesos for every irregularity found.

This provoked Larreta to say “What Gallardo has done…his judgements are more like politics. The thing is that after all the decisions we appealed to them and won.”

Larreta explained that the companies “are legally constituted, pay their taxes and are used by many people and produce a lot of jobs.”

Despite the suspension, the three companies still appear to be functioning in the capital. Following this decision, the three delivery companies released a joint statement underlining their commitment to the safety of their workers.

“The platforms meet the standards and local and nations regulations, and respond in a timely and formal way to the resolutions dictated previously by the court in this regard. For these reasons we are going to appeal the sentence and preventive measures…”

In late June, Ernest Floridia, a 63-year old Glovo worker, had to be hospitalised when he was rammed by a car while delivering pizza. Floridia told Glovo what had happened and the first question the company asked was “In what state is the delivery?”. Glovo then asked him to send a photo of the products he was delivering, to which he replied “No, I can’t move”.

Floridia was sent to a hospital, as he had sustained various injuries, before he was released after a few hours.

In April, Rappi employee Ramiro Cayola died after being run over in Puerto Madero while working. One of Cayola’s colleagues asked the company who would be able to take care of his dead colleague.

Rappi replied: “Thank you for telling us about this sad story, he will be a great loss to his family, he receives on part of Rappi’s team our condolences for the irreparable loss of our Rappi while he was carrying out work for us.”

At the end of April, Colombian-based Rappi raised $1 billion from SoftBank. The investment marked the largest technology financing to date in a Latin America-based company and brings it to a total of $1.4 billion in funding.

Around a similar time, Glovo, a Spanish company, raised $169 million in Series D funding led by Lakestar and Drake, owner of Papa John’s.

Uber is currently illegal in Buenos Aires as it doesn’t comply with the Transit and Transport code either which regulates these kinds of services. Despite this, it still operates although the authorities attempt to retain Uber driver’s cars and fine them around $214,000 pesos. In Argentina, Uber only became legal in Mendoza last year.

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