Supreme Court justice nullifies trial giving employee status to app driver

Courts have sided with platforms more often than not. Photo: Rostislav Sedlacek/Shutterstock

Brazilian Supreme Court Justice Alexandre de Moraes on Wednesday ruled in favor of ride-hailing app Cabify in a dispute over a driver’s employment status. Cabify ceased operations in Brazil in 2021.

The decision nullified a ruling by a regional labor court in favor of the driver, sending the case back to trial courts. Instead of judging the merit of Cabify’s appeal, Justice Moraes ruled that labor courts were not the right venue for the case, but rather regular trial courts. He did not delve into the merit of the case.

The justice nevertheless said that the Supreme Court has consistently recognized alternative labor relations that are not covered by Brazil’s CLT labor laws (which govern employer-employee relationships). The labor court disregarded that precedent, making for another reason for its decision to be overridden.

In its arguments, Cabify stated that “the driver can decide when and if he will perform a service” and that “there is no minimum requirement for hours of work.”

It added that “the company could never have hired the driver to perform transportation services as it does not provide transportation services to passengers.” This is a crucial element of ride-hailing platforms’ arguments that the service they provide is simply connecting workers and customers.

In a study cited by finance newspaper Valor, legal data company Data Lawyer Insight tallies over 21,700 cases pitting gig workers and platforms over their working relationship. About 7,000 have reached a verdict phase — with about two-thirds of them going the companies’ way.

There are currently seven class-action lawsuits around the issue in progress, none with a final decision. While some judges recognized workers as employees, others claimed that what exists between workers, couriers, and platforms is a “contractual relationship.”

Last year, think tank Fairwork published a report rating the working conditions offered by platforms in Brazil to their so-called “partners.” None made the cut. Still, despite the dire working conditions, app drivers might not be ready for a formal work relationship, a new survey by renowned pollster Datafolha suggests.

Commissioned by Uber and iFood, Brazil’s biggest delivery app, the survey reveals the complexities of regulating the gig economy — something the Luiz Inácio Lula da Silva administration has made a priority.

After listening to 2,800 gig workers, Datafolha found that 75 percent of app drivers and 77 percent of delivery couriers would prefer to maintain their current relationship with platforms, which sees them as autonomous contractors, rather than have a formal work bond with them as an employee.

Maria Luiza Dourado

Maria Luiza is a business and tech reporter. She has been published by Pequenas Empresas & Grandes Negócios, TC, and Olhar Digital, and has experience in real-time coverage of financial markets.