Brazil court says delivery app Loggi has to formalize work relationships

SAO PAULO, Dec 6 (Reuters) - A Brazilian court ordered delivery app Loggi to formalize its work relationships with all the motorbike drivers working for it in the country, according to a decision released on Friday.

Around 15,000 motorbike drivers work for the app in Brazil. The court has also ordered Loggi to pay 30 million reais in compensation.

Loggi reached a market value of $1 billion in June after raising $150 million in an investment round that included SoftBank Group Corp, Microsoft Corp, GGV, Fifth Wall and Velt Partners.

Formal work relationships in Brazil mean higher costs for companies, since they are obliged to make contributions in the name of employees to some government-managed funds and toward the public pension system.

Most motorbike drivers working with deliveries in Brazil are not formal workers but rather outsourced or independent workers.

The class action lawsuit against Loggi was opened in 2018 by Sao Paulo prosecutors, who said the app had an unfair advantage over other delivery competitors who maintain formal work relationships with their delivery workers.

The decision by a Sao Paulo court favored that argument.

Loggi did not have an immediate comment about the decision on Friday. (Reporting by Peter Frontini; writing by Marcelo Teixeira; editing by Jonathan Oatis)