Brazil eyes social security plan for mobile app workers

3 minute read

Food delivery bags are pictured as Brazilian delivery workers for Uber Eats, Rappi and other delivery apps protest as part of a strike to demand better pay and working conditions, amid the coronavirus disease (COVID-19) outbreak, in Sao Paulo, Brazil July 25, 2020. REUTERS/Amanda Perobelli/File Photo

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BRASILIA, April 27 (Reuters) - Brazil's government is studying the creation of a social-security system for mobile app workers, especially for delivery and transportation services, Labor Minister Jose Carlos Oliveira said on Wednesday.

Technology companies and gig workers would contribute to the new welfare system, which will be proposed as legislation before the end of this year, the minister told reporters.

"Finding a new model of legislation is not easy," Oliveira said, adding that the proposal was developed with input from tech companies and the service providers on their apps.

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The aim is to reduce precarious conditions for app workers, whose numbers have increased exponentially in recent years with the growth of ride-hailing apps such as Uber Technologies (UBER.N) and 99, along with food delivery services like Rappi and iFood.

One challenge in Brazil has been how to include app workers in social security coverage, allowing them to receive more than a minimum wage when they retire, without making them subject to the country's strict labor code for full-time employees.

"The workers have been clear that they do not want to become full-time employees. They want to remain self-employed to maintain the freedom to define their working hours and days, as they do today," said Deputy Labor Minister Bruno Dalcolmo, who is leading the discussions.

The proposal under analysis would involve payments by the companies while establishing that there is no formal employment relationship with their workers, Dalcolmo said.

"The companies know they will have to contribute and that they need to improve the relationship with their workers," he added.

On the employers side, the main concern is not to create legislation that is so strict that it undermines their business models and reduces competition, the officials said.

Uber, 99 and iFood all said in separate statements that they support inclusion of app workers in social security coverage with platforms contributing their part.

"It is critical that this social security integration is based on a more advantageous model for drivers and delivery workers than the current options, which are considered too expensive and bureaucratic by most of these workers," Uber said.

Diogo Souto, 99's public policy director, said the company understands its role and is committed with drivers.

"We also propose direct participation in financing social protection for partner drivers, reducing the impacts on their income," he added.

Delivery services firm iFood said the upcoming bill must be in line with new work models that give workers autonomy, and that it defends that companies should be responsible for most of the contributions required.

Rappi said it was taking part in the discussions through ABO2O, an association of which it is a member.

App workers today can make social security contributions as individual micro-entrepreneurs, but most do not.

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Reporting by Lisandra Paraguassu; Additional reporting by Gabriel Araujo in Sao Paulo; Writing by Anthony Boadle; Editing by Bill Berkrot

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