(Bloomberg) -- Mexican lawmakers are set to discuss a proposal that gives more benefits to drivers and couriers working for digital apps such as Uber Technologies Inc., Didi Global Inc and Rappi Inc., including the rights to participate in the profit-sharing of the companies and to form unions.
President Claudia Sheinbaum submitted to Congress late Tuesday a proposal to reform Mexico’s labor law to establish that if a person earns the minimum Mexico City’s monthly wage working in these apps (around $370), the person must be considered a formal worker and receive all the benefits of the law, “regardless of the time actually worked,” according to the draft.
The bill also states that if the person earns less than that amount per month, the worker will be considered self-employed, without access to all of the benefits.
The proposal also requires that companies register and cover their employees’ social security benefits, including health services, work risk insurance and retirement savings. The reform was sent to the Lower House’s labor committee and is scheduled to be discussed by the floor of Congress in the coming days.
The plan to improve rights for courier and driver app workers was among the 100 promises Sheinbaum made in her inaugural speech on Oct. 1. When the proposal was presented later that month, Labor Minister Marath Bolaños said the bill would aim to impact around 658,000 workers and give them benefits such as protection against accidents, housing credits and maternity leave.
Mexico’s ruling party, Morena, has large majorities in both houses of Congress. The legislative body has already approved a series of constitutional changes, including reforms to the judiciary, changes to the energy sector, and a project that guarantees increases to the minimum wage.
Other points of the proposal include allowing app workers to form unions and collectively bargain their working conditions, which would be enforceable by government authorities. Sanctions may include financial penalties proportional to the level of non-compliance.
The bill also calls for workers to participate in the profit-sharing of the companies, provided that they have worked more than 288 hours per year. The companies will have to publish their annual earnings reports to “ensure greater transparency” and respect “reasonable limits on working hours,” according to a separate document on the bill being discussed by lawmakers.
To calculate the hours worked, the bill considers that these workers work an average of 0.75 “effective hours” for every hour, as they spend about 15 minutes on standby on average for every hour, the bill says.
“Left Behind”
“This proposal recognizes the essential role of digital platform workers, who, despite being the engine of sectors such as food delivery and transportation, operate in a legal vacuum that leaves them unprotected,” according to the lower house’s separate document. “Labor relations in this sector are often ambiguous, as digital platforms are positioned as technological intermediaries and not as direct employers.”
According to the bill, digital platform workers have been left behind, so it is necessary to incorporate them into a “regime of social rights, such as labor, health and housing benefits.”
An association of courier and delivery providers, which represents companies including Rappi, Uber and Didi, held a series of talks with government authorities after the bill was initially proposed. The conversations resulted in a series of agreements, including a commitment that the “current tax load” will be maintained for the service providers, the group, known as Alianza In Mexico, said in a November statement.
The association on Wednesday night called on Congress to establish a comprehensive dialogue on the proposal that includes the government, lawmakers, representatives of digital platforms and workers. The group said that several topics require further analysis, including greater clarity on the tax regime that will be applied to the digital platforms and details on the guidelines to be issued by the social security institute.
The companies’ arguments are expected to be heard this week in Lower House’s labor committee.
(Updates with details of the bill throughout.)
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