Price fixing for delivery services puts app-based law under fire (and could end up in court).

Brasilia - Targeted by criticism from digital transportation and delivery service platforms (ride-hailing or goods delivery apps), the bill regulating app-based work is far from reaching a consensus and is under fire from companies, and may end up in court due to the fixed delivery rates.

Companies in the sector have been criticizing the creation of a fixed price per delivery, which they believe is a price regulation incompatible with regional aspects and distances. They also reject a limit on the intermediation fee charged by platforms. In general, they advocate for freedom and flexibility in pricing delivery services, as is already the case today, according to sources consulted by NeoFeed .

“It’s difficult to leave out [the minimum price per delivery] from my report. I’m suggesting R$ 8.50 per delivery, the government wants R$ 10, but there has to be some limit to make it fair for the delivery drivers,” said federal deputy Augusto Coutinho (Republicanos-PE), rapporteur of the bill on the regulation of app-based workers, to NeoFeed .

Delivery drivers want at least R$10 per delivery and R$2.50 for each additional kilometer. "We are making adjustments and discussing a middle ground between what the government and the companies want, but if we can't reach a consensus, we will vote in the plenary session [of the Chamber of Deputies]," he states.

Coutinho is preparing a new report within the framework of a special commission created to debate the bill, which should be presented by the end of this month and ready for voting in early April. He has the support of the Speaker of the House, Hugo Motta (PB), his party colleague, who also wants the vote to be expedited.

The rapporteur also revealed to NeoFeed that he intends to set a 30% limit on the intermediation fee charged by apps. And he is unwilling to change this point: "Companies will have to accept the 30%."

However, ultimately, if Coutinho does not make these changes to the text related to price and fees, there is even a risk that the platforms will go to court claiming that price fixing is unconstitutional and violates the logic of the free market – the same discussion that took place at the time of the minimum freight rate, a measure adopted by the then Michel Temer government to negotiate an end to the 2018 truckers' strikes.

“I’m not worried about litigation. I want to move forward with the law. If they want to litigate, let them. I don’t believe that [multinational] companies will leave Brazil,” the congressman added. “The Brazilian market is Uber’s second largest in the world.”

On the other hand, the rapporteur hints at a retreat in the new version of his report: to classify the platforms as technology service companies and not in the transport sector, as his previous opinion suggested.

The companies warn that simply classifying them as part of the transportation sector would lead them to pay more taxes and potentially pass these additional costs on to the workers registered on their platforms.

To explore potential improvements and adjustments to the text, Coutinho and Motta met last week with ministers Gleisi Hoffmann (Institutional Relations), Guilherme Boulos (General Secretariat), and Luiz Marinho (Labor), as well as with leaders from the CNI (National Confederation of Industry) and Abrasel (Brazilian Association of Bars and Restaurants).

Behind the discussion of the proposed law, authored by Congressman Luiz Gastão (PSD/CE), the Executive branch wants to attract delivery drivers and app-based drivers to its political base, a group more associated with Bolsonaro and the right wing.

The last opinion issued by the congressman from Pernambuco, in December of last year, had already generated harsh criticism, especially from app companies that mediate between drivers or delivery people, passengers, and commercial establishments. Behind the scenes, the platforms called the text a "disaster" and "damaging."

In that version, Coutinho set the minimum fare per ride at R$ 8.50 for both delivery drivers and passenger drivers. In the new text, however, he told NeoFeed that he will remove this fixed rate for passenger drivers (and maintain it only for delivery drivers, such as motorcycle couriers and cyclists).

The platforms

According to André Porto, executive director of Amobitec, an organization representing app platforms such as Uber, iFood, 99, Amazon, Shein, Zé Delivery, and Buser, the previous report on the regulatory project already raised several "tragic" points, such as classifying them as transportation companies. These companies argue that they do not own fleets of cars, motorcycles, or bicycles for deliveries, for example.

“We are awaiting the new report from Congressman Coutinho. But a major concern is the price fixing, both in the platform retention fee and in the price of rides. This is detrimental to workers and also to consumers,” says Porto.

“We will continue the dialogue and advocate for this to be removed from the text. We want to convince parliamentarians that there will indeed be harm to the sector and also an impact on the demand for orders on the platforms.”

Porto, however, believes that companies are in favor of regulating app-based work, as long as it is balanced.

A source from a major digital platform says that price fixing will also affect company revenue and reduce delivery drivers' income, since the trend is to eliminate the "dynamic pricing," which takes into account different types of delivery drivers and distinct economic realities depending on the city.

On another front, delivery workers' associations have been questioning the companies, arguing that the margins charged by the platforms include abusive profits, as argued by the National Alliance of App Delivery Workers (Anea). They are promising a strike on March 31st and April 1st to demand R$ 10 per delivery up to 4 kilometers, R$ 2.50 per additional kilometer, and R$ 0.60 per minute of waiting time.