Uberbras? The history of state attempts to replace successful apps

Luiz Marinho, Lula da Silva’s labor minister, told Valor Econômico this week that if the transportation app Uber leaves Brazil in response to government moves to regulate the sector, he can “call the Post Office, which is a logistics company, and tell it to create an app and replace it.”

He also claimed that the app threatened to leave Spain for this reason, but the company denied it in a note to Gazeta do Povo.

The suggestion made by the minister of the state meddling in the app market, however, has been tried before in other ways.

In March 2022, mayor Eduardo Paes‘ city hall in Rio de Janeiro launched the Valeu app to compete with the food delivery app iFood.

An idea of the Municipal Secretariat of Finance and Planning, Valeu promised “zero cost for restaurants for orders of up to R$100” and double pay for delivery drivers.

On its website, the city government justified the initiative by saying that restaurants were “suffocated by service fees that vary from 28% to 41% on the value of orders in other applications” such as iFood.

It also promised that “for purchases of less than R$100, the delivery drivers would receive a minimum amount of R$7,” more than the average of R$5.5 practiced in the market.

For more expensive purchases, they would receive an additional 2% of the value of the order.

The state-owned Empresa Municipal de Informática developed Valeu do Rio (IPLANRIO). To this day, it is not available on Google’s app store, suspended by a court decision.

LIBERAL COUNCILMAN VICTORY

Councilman Pedro Duarte, from the Novo Party, faced the city government in court and won.

In a popular action soon after the Valeu app was announced, he argued that the app did not have “details of the costs and expenses with the creation and maintenance”.

In addition, according to him, the relationship between the city and IPLANRIO had minimal transparency about the expenses, and there would be no demonstration of public interest in the intervention of public power in the market.

Repeatedly, Duarte won the judicial arm wrestling.

On June 27, 2022, Judge Luciana Losada Albuquerque ruled that the state-owned company was “acting prejudicially to free competition” and criticized Eduardo Paes for trying to do everything by decree instead of issuing a formal law.

On the 16th of the following month, in a decision denying the city government’s appeal, Judge Milton Fernandes de Souza added that the allegation of “immediate risk of serious damage” caused by the suspension of the application was not concrete.

Finally, in a ruling in October 2022, the judges of the Fifth Civil Chamber of the Court of Justice once again denied the city’s appeal, praising as “lucid” the Public Prosecutor’s Office opinion stating that the municipal executive was contradictory in claiming that Valeu would only be an intermediary between users and restaurants, not being a means of payment, while promising increased income.

Pedro Duarte told “Gazeta do Povo” about the labor minister’s idea:

“This plan is a joke. It’s not up to the State to suffocate the private sector and invent its own role. It will spend a fortune and still won’t succeed. These companies invest a lot to have state-of-the-art technology, customer service, and algorithm study; it’s very complex. I don’t see any chance of a state-owned company doing this right, zero.”

OTHER STATE INITIATIVES

In April 2018, the São Paulo city government launched the SP Táxi app to compete with Uber, 99, inDrive, and others in the segment.

The Google Play store reports 100,000 downloads, but the app cannot be installed on recent model phones. The last update is dated May 12, 2021.

The app’s store page on a computer says, “this app is not available for any of your devices.”

The report tried to install it on a Samsung A52 model, but the link says “something went wrong”. It does not appear in the direct search in the store.

A G1 story from January 2020 reports that the São Paulo city government was seeking, through a public notice, a private company that would manage the SP Táxi.

In November 2019, Curitiba also launched its own app, URBS Taxi, with a promise of a 40% discount on the meter.

It is rated 2.1 out of 5 in the Google Play store.

The most recent user comment is from February 2020, complaining that the app “doesn’t let you know if you can call the cab, I asked, and I thought I didn’t get it.”

He gave it a score of 1. The last update to the app is from December of that year.

Another attempt is the Bibi Mobility app, supported by the Araraquara City Hall but run by a cooperative of app drivers, Coomappa.

On its website, the app says its first version is private and dates back to 2019. I

t was announced by the city government a year ago and promises 95% of the fare for drivers.

Bibi sells franchises to other municipalities, is installable on Android apps, and has a 4.1 out of 5 rating on Google Play.

There are already complaints.

On the site Reclame Aqui, a complaint originating in Fernandópolis, also in the interior of São Paulo, has been unresolved for six months:

“I bought a Bibi Mob franchise for a city with more than 600,000 inhabitants,” says the complainant (Fernandópolis, however, had an estimated population of 69,000 according to IBGE in 2020), “the company has no structure to deal with what it says it offers.”

Another complaint, from Rio Branco in Acre, says that the training is inadequate.

According to the reports, the franchise costs about R$7,000.

The company responded to both, but they marked their problem as unsolved.

Kauane Vallone, secretary of Coomappa in Araraquara, told the report that “Bibi no longer works” in the city and that the cooperative has broken the contract with the city government.

“It was the same thing as nothing. They just used us to climb the ladder,” Vallone said.

“There is no more partnership with the city hall, and neither is the support.”

Gazeta do Povo contacted the city halls of São Paulo and Rio de Janeiro and the Bibi Mob app. The report will be updated if they manifest themselves.

With information from Gazeta do Povo