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Rappi, Glovo and Orders Now: how do they divide the business and why they are a "time bomb"

Rappi, Glovo and Orders Now: how do they divide the business and why they are a "time bomb"

Rappi, Glovo and Orders Now: how do they divide the business and why they are a "time bomb"
Delivery apps were growing in public acceptance, but also in claims of their workers. How is their business and how do they diversify?
Por iProUP
30.01.2019 14.21hs Economía Digital

Just a year ago, the streets of Argentina were populated with workers on wheels with flowing clothes, motorcycles or bicycles and colorful boxes to transport "whatever". The Buenos Aires landscape and then that of other cities were taking on another color with the arrival of delivery applications.

The first was PedidosYa, created by Uruguayans Ariel Burschtin, Álvaro García and Rubén Sosenke in 2010 and sold in 2013 to the German group Delivery Hero. Faced with the imminent arrival of the competition, he added his own distributors to make deliveries to restaurants that did not have delivery and online payments.It also added stores in which to make purchases, such as pharmacies and supermarkets, and opened in 2018 a logistics center in Palermo to "centralize tasks."

Glovo, on the other hand, is a startup that was founded in 2005 in Barcelona. It has been in Argentina for a year and it already has a presence in Buenos Aires, Cordoba, Rosario, La Plata, Mar del Plata, Pinamar and Mendoza.

"The growth was very strong, even more than we expected, the Argentine user received the service very well because it was used to delivery, it is part of our culture," affirms iProUP Matías Gath, Country Manager of the firm.

According to the manager, "the arrival of Glovo gave a level of performance much better than the one that existed because through the cell phone you can pay with a card, get in touch with the delivery person and send them from wherever you are".

To date, the company has obtained 1.5 million downloads, 700 affiliated stores and nearly 10 thousand registered glovers.

In order to consolidate its landing in the region, Glovo launched a financing round of US $ 30 million in 2018. In the country, the majority of the initial capital "was allocated to accelerate resources, to enlarge the equipment", which today is composed of 100 people of different profiles."Argentina was chosen not only to have its own operation, but also to be the Latin American hub, we have sales, operations, marketing, customer services, analysis, except for technology, we have the same areas as in Barcelona," Gath explains. .

In this sense, the executive anticipates that the company is analyzing having a new technological hub in the country. "Because of the talent that exists, it is considered among the main candidates", he points out.

For the next few months, geographic expansion is under study. "We have orders for Glovo to reach more cities, and in an adverse economic environment, the platform offers businesses the opportunity to increase their revenues," he says.

For his part, Rappi was born in Colombia almost four years ago and arrived in the country in February 2018. Through his app you can also buy and even order "Rappi Favores", something like "I forgot the key in the office, Can you bring it to me? "The platform today has a presence in Buenos Aires, Córdoba, Rosario, La Plata, and different areas of Greater Buenos Aires.

"Since our arrival in the country, we registered increases of 25% per month in orders, the first year of operation was disruptive," says Matías Casoy, general manager of the firm in Argentina, to iProUP, who adds: "We finished 2018 with half a million of orders in the last month ".

In Argentina, the company has almost 200 employees. On the one hand, sales people, marketing, human resources and, on the other, adds Casoy, "we realized that there was enormous potential to create a technology hub."It is made up of a hundred developers, not only from Buenos Aires, but also from other cities in the country, which provide solutions to Rappi Argentina and the eight nations of the region in which it operates.

"This year we want to increase the development team by at least 50%," the manager anticipates, remarking: "In 2018 we invested more than US $ 10 million and we expect to double that amount this year. : we want to quintuple the business for December ".

The plan to achieve this will be to "enhance the star verticals, which are supermarkets, specialty stores and the 'Rappi Favores'".

"In addition, we will add the vertical" Rappi Cash ", for the user to ask for money at home.A month ago we launched payments with QR There are 400 stores in Buenos Aires where you can pay with RappiPay and receive a gift in return", complete Cassoy.

Another platform that already operates in Argentina is Uber Eats, a separate app and different from Uber. Although it works in more than 350 cities around the world, in the country, for now, it only came to Mendoza -province in which the firm is legal- and to Córdoba.Why did they grow so much in the region and mainly in Argentina? The reasons are varied, the evolution of technology adoption is one.

However, there are many others, very notorious: lack of employment, income inequality, immigration, overpopulation in metropolitan areas, lack of public transport infrastructure and traffic chaos.Precarization 4.0?

The other side of the phenomenon is that these companies employ self-employed workers who bill for their services and do not belong to the plant. According to the companies, cyclists "have the freedom to work when they want, as long as they want".

However, there are those who see distributors as "undercover employees", since they have no contract, no agreement protects them and, if they have an accident, the expenses are on their own."They have no social work or holidays and they are the ones who even pay for the Internet," says Emiliano Guillo, a journalist who for ten days was "rappitendero" to live the experience in the first person.

Against this background, workers of these services were presented in October to the Secretary of Labor to register the first union of platforms in Argentina and America: the Platform Personnel Association (APP).

"The Rappi workers began to meet and discuss how to improve our working conditions, we were called to participate with slogans such as 'be your own boss', but quickly we began to realize that the applications worked thanks to us and we could not decide anything "they affirmed.

Juan Manuel Ottaviano, labor lawyer and legal advisor of APP, explains to iProUP that the union emerged as a tool, because "they are hired as self-employed and, therefore, have no fixed salary, work well above the legal limits to reach a decent income and do not have accident or disease insurance (ART), or breaks, or vacations. "

"The union made the presentations required by law, the company for which the majority of the members of the board of directors worked decided to dismiss them," Ottaviano complains, adding: "APP has promoted lawsuits for discriminatory dismissals while seeking legal recognition."Some of those rights are recognized in PedidosYa, but in part. According to their delivery drivers, although they are blank, they are never clear about their salary.

"They pay us out of term with the excuse of faults in the system and we modify all the time schedules," they claim.

Cassoy, from Rappi, clarifies to iProUP that the "rappitenderos" are independent. "After downloading the application, they are enabled to connect and disconnect when they want and take orders or not," he remarks.

"Rappi is an open platform that connects a user who wants to buy, a business that wants to sell and a delivery person who wants to distribute, and the distribution users who choose which order to take", he stresses. And he emphasizes that the only profitability that Rappi has is the commission to the more than 2,000 associated businesses.

"What the consumer pays for the cost of delivery goes entirely to the delivery person," says the manager and adds: "From Rappi, we always work actively with all the relevant actors, legislators and government, to accompany and develop the conditions required in each case. city".

Regarding the dismissals, Cassoy assures that "under no circumstances Rappi disqualified a delivery person for suggesting work improvements or demonstrating", although he clarified that they have "rules of coexistence that apply to everyone so that the ecosystem is healthy".

Meanwhile, Gath explains to iProUP that Glovo is "in favor of the union because the law has not yet contemplated the technology sector, which is beginning to position itself and its own players are looking for how to structure themselves.""It makes sense and is positive for us, to understand what happens on the street, what needs to be improved," says the manager, adding that the firm's business is based on the user's shipping cost, " that amount goes to the delivery people. "

"We are a platform that contacts consumers with businesses, to whom we charge a commission for that sale that we generate them with the 'glovers' we have a user-platform relationship They are independent, they choose whether they connect or not, if they accept an order or not, if they want to work a rainy day or not, "he remarks.

He adds: "Many choose it as something complementary to other types of activities, to have an additional income, it is a profile of a person who wants that freedom."

On the other hand, Rappi added another accusation of precarization: it was denounced by the Asociación Argentina de la Publicidad (AAP), after launching a contest calling for designers and creatives to send their ads to participate for US $ 15,000.

"It is essential that all advertisers, regardless of their size and origin, understand that the work of creatives, designers, community managers and any other specialist has a value and that any professional who is asked to work must be paid for it" , complained the entity.In the world

Companies like Rappi and Glovo are being sued all over the world for failing to comply with the freedom that promises and violate rights, "disguising their employees as self-employed", according to the distributors themselves.In several countries, the Justice determined that the work on platforms is not autonomous, but must be framed in the traditional labor scheme.

In July, the Spanish Labor Inspectorate demanded that Deliveroo, the company with the largest presence in Europe, hire hundreds of delivery workers and pay 1.3 million euros to Social Security and surcharges not paid by its workers in Barcelona. The claim was moved to Madrid and Valencia.

In Australia, Foodora (also of Delivery Hero) acknowledged that bicyclists who provide their delivery service belong to their plant and that they owe $ 8 million in retroactive salaries, taxes, etc.In Italy, the Court established that five ex-distributors must be considered as employees, with paid vacations, medical insurance and compensation under those conditions.

The same happened in France where, for the first time, the Court of Cassation in Paris considered a cyclist as part of the payroll. In this case, the company was TakeEat Easy, which went bankrupt in 2016.

Faced with this global context, Gath points out that Glovo "does not go through any situation in which distributors should be considered as employees".

"In almost all the countries where we are, the law has dictated in our favor and has said that 'it gives total freedom and is an' intermediation platform. 'Others, who are not in Argentina, have had these problems," Add.

According to Rappi's Cassoy, "it is important to understand that collaborative economies are changing the way consumers interact with suppliers of products and services around the world."The end of the platforms?

The advancement of regulation should not imply the end of the business, but that the companies comply with the rule and the workers receive a proper treatment.

The digital economy allows opportunities to create employment, but this requires that decision-making by those responsible be expedited, since technology advances much faster than the law.

"This evolution eats workers' rights, in literal terms, they play their lives and expose the body on bicycles, it is up to lawmakers to put a brake on it, regulate it, and that technology continues to generate better living conditions not only for who receives the service but also for the person who executes it, "says Guillo.In the world there are already some signs to regulate the collaborative economy. At home, everything is slower.

Not long ago Netflix and Spotify pay taxes in Argentina and only now those who travel with Uber will be insured. Will platform distributors be considered as employees to ask for "whatever"? It is very likely that the answer to this question does not take long to arrive.

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