Rappi failed to comply with regulatory orders, Colombia says

BOGOTA (Reuters) - Popular on-demand delivery app Rappi faces a new probe in Colombia after allegedly failing to comply with regulatory orders to improve its response to customer complaints, the country’s commerce watchdog said on Wednesday.

FILE PHOTO: The logo of the Colombian on-demand delivery company Rappi is seen on a delivery bag in Bogota, Colombia September 12, 2019. REUTERS/Luisa Gonzalez

Rappi delivers items ranging from food and tobacco products to concert tickets, letting clients pay cash or with the app. It is majority-owned by SoftBank, which injected $1 billion into the company earlier this year.

The Superintendency of Industry and Commerce “has formulated an investigation against Rappi S.A.S. for an alleged unfulfillment” of its orders several months ago to comply with electronic commerce laws, it said in a statement.

The agency said in September that Rappi was a “commercialization chain” subject to different regulations.

The regulator also said in September that it had opened an investigation into the app, which is popular for food deliveries from restaurants and supermarkets, after receiving hundreds of customer complaints.

Rappi allegedly failed to comply with five of the requirements set by the regulators in their previous decision, the statement said, including failure to modify terms and conditions, problems with changes to the prices of some goods and the lack of proper complaint system.

If the company is found guilty, it could face “successive fines” of up to 1,000 minimum monthly salaries, or about $244,700 each.

“Not having a complaints channel for their customers, the fact that there is still confusion in the terms and conditions ... the final price for the consumer still being unknown and variable, the fact they are still not giving full attention to the complaints ... calls our attention,” Superintendency head Andres Barreto told journalists.

Rappi said it was waiting to be notified of the investigation, but co-founder Simon Borrero said at a conference that the company wanted to open a dialogue with regulators.

“I would love to meet with them and talk over things. We are trying to build a great company that will benefit the country,” Borrero said. “The claims are about things that are not the reality of our business.”

Rappi, founded in 2015 in Colombia, also operates in Brazil, Mexico, Argentina, Chile, Peru, Uruguay and Costa Rica.

Reporting by Luis Jaime Acosta, Nelson Bocanegra and Julia Symmes Cobb; Writing by Julia Symmes Cobb; Editing by Richard Chang