December 6, 2019 / 6:49 PM / 2 months ago

Brazil court says delivery app Loggi must formalize ties with couriers

SAO PAULO (Reuters) - Brazilian delivery app Loggi must formalize work relationships with its motorbike drivers and pay charities 30 million reais as a fine for not previously contracting the workers, according to a Sao Paolo court ruling released on Friday.

Around 15,000 couriers use motorbikes, which can cut through heavy traffic, to deliver a wide range of items to customers using the app in Brazil. Most of the drivers are not contracted workers, saving companies costs such as contributions to government-managed funds and the public pension system.

Loggi said it would appeal the ruling, arguing that delivery workers have their own companies under a model of micro entrepreneurship recently introduced by the federal government.

Loggi reached a market value of $1 billion in June after raising $150 million in an investment round that included SoftBank Group Corp (9984.T), Microsoft Corp (MSFT.O), GGV, Fifth Wall and Velt Partners.

Reporting by Peter Frontini; writing by Marcelo Teixeira; editing by Jonathan Oatis and Richard Chang

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