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