For the past five months, Brazil’s Lula government has focused on gig workers.
The government argues that these workers, often freelancers for apps like iFood, need regulation.
The administration recently introduced a bill in Congress. This legislation aims to tax both platform companies and their workers.
Specifically, companies will pay 20% towards social security and drivers 7.5%.
Many gig workers oppose this move. João, a delivery driver from São Paulo, sees it as a hindrance.
He says the gig economy apps have enabled him to earn a substantial income despite a lack of quality education. The new taxes, he fears, will push him back into poverty.
During the pandemic, these platforms served as a financial lifeline.
Last year, a study found that about 32.4 million adults, or 20% of Brazil’s adult population, worked for such apps.
The bill also proposes a fixed hourly rate for workers, fueling ongoing negotiations.
The companies insist they are service intermediaries, not transport services. They also argue there’s no employer-employee relationship between them and the workers.
A recent court ruling, however, required Uber to make social security contributions for its drivers.
Furthermore, the company had to pay a fine of approximately $200 million for collective moral damages.
Brazil’s high unemployment rate, at 8.8%, further complicates the situation.
Labor Rights
Last week, during a meeting with U.S. President Joe Biden, Lula discussed the importance of labor rights.
In contrast, union functionalities in Brazil and the U.S. are vastly different. Brazilian unions don’t have to disclose their financials, unlike their American counterparts publicly.
Yet, there’s a trust deficit between workers and unions in Brazil.
Unions have become more like stepping stones for political careers rather than true representatives of worker rights.
Recently, a local union started imposing a 150-real fee on freelance workers who refused to make union contributions.
Additionally, the government has reintroduced mandatory union contributions, which have dropped by 98% in the past five years.
So, the tension between gig economy platforms and unions is high. Whether the situation will resolve in favor of workers or companies remains uncertain.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.