Fuel price hike, delays and labor fights threaten Uber and 99 in Brazil

Requesting a ride on the Uber application. (Ricardo Oliveira/Cenarium)

January 3, 2022

17:01

Marcela Leiros – from Cenarium Magazine

MANAUS – Transportation apps like Uber and 99 arrived in Brazil from 2014 and since then it was possible to notice, over time, a boom in supply and demand for this type of service. However, unlike nine years ago, the country’s economic scenario has created an unsatisfactory cycle for service operators, drivers, and even passengers, putting the future of these transportation alternatives at risk.

The increase in fuel prices, for example, has made it unviable for drivers to remain dependent on this source of income, which does not offer an employment relationship. Therefore, there is no return on benefits such as social security contributions, retirement, or vacations. Today, gasoline costs, on average, R$ 6.69 and ethanol R$ 5.29. Added to this is the fee that the companies take from the amount paid by passengers, leaving the drivers with “almost nothing”.

“The price of gasoline skyrocketed absurdly. It went from R$3.50 on average to R$6.50. The operator doesn’t help you, he sends you a client two kilometers away for you to pick up. This displacement there, you don’t get the service. They give you the option to cancel, but in return your performance rate goes down. You are practically in debt. Today, the rate is almost 20%. You do four runs and, in the end, you are in debt”, says retired and driver Emanuel Almeida, who has been driving on Uber for two and a half years.

Almeida also explains that many drivers rent vehicles to provide their services. With this, the value of fuel, car rental, maintenance and fees passed on to operators discourage those who want to continue “doing Uber” or another application.

“Today you can’t afford to work with a rented car, you make R$ 220, take R$ 80 from the rented car, the lowest fee, if the guy is your friend, and R$ 100 (reais) from gasoline, and you still have the company’s percentage, you keep nothing”, explains the driver.

“There is no risk of them leaving Brazil because this here is a mine for them, what is hurting them more is the gasoline, because 80% of the cars that were rented are being returned. When you open an application at four o’clock in the afternoon you have calls all over the city and the demand for cars to serve you is minimal”, he recalls, still with dissatisfaction.

Passengers dissatisfied

Besides the complaints from drivers, passengers are also dissatisfied with the cycle that is formed with the obstacles in providing the service. Delays in answering the call, more cancellations by the drivers, and higher prices than in the beginning, are some of the problems pointed out.

“The main difficulty of taking a car application during the day is that the value has increased exponentially and ended up being another obstacle in getting around. Another reason is the delay to accept the request and when they accept many times they end up canceling either because it is a very long route or because the value is low, but they do not understand that the customer has nothing to do with the value set by the company itself”, explains journalist Victória Sales.

Employment relationships

In these almost 10 years of providing transportation application services in Brazil, the regulation of the service has raised debates. Taxi drivers pressed for legislation to ban the service in the country and the app drivers themselves began to claim their rights. Law 13.640/2018, the “Uber Law”, allowed municipalities to carry out their own regulations. Last December, the majority of the Superior Labor Court (TST) recognized the employment relationship between Uber and drivers, but the trial was suspended after a request for examination.

For lawyer Camila Almeida, the approval of a labor legislation between drivers and operators may jeopardize the viability of this type of service provision in the country. “The future is uncertain, even because the Brazilian labor, fiscal, and tax legislation differs from that of other countries, which makes the recognition too onerous for the application”, she points out.

“Recognizing the employment relationship between the driver and the application is an affront to private initiative and entrepreneurship. The transportation applications provide a service to the driver and the passenger bringing them closer to each other. The driver who uses the service of the application is autonomous, there is no legal subordination between the driver and the platform, because, by staying offline for as long as he wants, it is evident the freedom and autonomy to be able to set the time and day that he wants to exercise the activity, without any obligation as to the trips suggested by the application”, she further explains.