Fairwork Chile Ratings 2021: New report about the gig economy in Latin América

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By Arturo Arriagada, Macarena, Bonhomme, Francisco Ibáñez, Jorge Leyton, Funda Ustek-Spilda, Mark Graham, Alessio Bertolini

The report ‘Fairwork Chile Ratings 2021’ evaluates seven of the most prominent delivery and ride-hailing platforms in Chile – Uber, Uber Eats, Cabify, Rappi, Pedidos Ya, and DiDi – against the five global principles of Fairwork.

Latin America has been at the centre of recent debates about the precarious and unfair conditions of workers in the platform economy. The Fairwork project is now present in five Latin American countries—Chile, Colombia, Ecuador, Argentina and Brazil. This report on Chile presents the second set of Fairwork ratings for the region, following the 2021 report on Ecuador.

The gig economy in Chile has been slowly consolidating, with early adoption of transportation apps (Uber and Cabify), followed by delivery for restaurants (Pedidos Ya, Rappi), and groceries (Cornershop, a Chilean-designed app that operates internationally and was recently acquired by Uber). The economic effects of the COVID-19 pandemic in Chile have encouraged thousands of formal workers to join the gig economy. The report calculates there are approximately 15,000 app delivery drivers and 200,000 ride-hailers in Chile. However, there are no reliable statistics to measure the size of this market.

In Chile, as in many other countries, the pandemic has deepened existing inequalities, especially for women and migrants, who suffer greater vulnerabilities. Moreover, the economic recession, with the associated loss of work and salary cuts, has forced migrant workers to work more hours on the platforms, especially given their uncertain (or worse, undocumented) immigration status, and lack of access to public health coverage, often due to a fear of being deported. Although worsening economic conditions are of concern to platforms, they are a real threat to workers, who bear most of the risks of the work.

Overall, our ratings reflect that there is much to be done to ensure fairness in Chile’s emerging platform economy. The results demonstrate the need to gather more, and increase the transparency of, information on this market – its functions, its size, the income generated by its workers, and the labour trajectories of those who are part of it.

Ratings Fairwork Chile 2021

The ratings achieved by the platforms operating in Chile are very low, with no platform scoring more than two points out of ten. Uber, Cornershop, Cabify, Pedidos Ya, and Uber Eats all scored two points, Rappi and DiDi scored one.

Main findings:

Fair pay

Workers were found to earn above the local minimum wage (in Chile, $326,500 pesos for a 45-hour workweek) before costs are considered. However, none of the platforms was able to evidence that they pay a fair wage after accounting for workers’ expenses, such as gasoline, and depreciation of the car, motorcycle or bicycle.

Fair conditions

No platform was able to provide evidence of concrete and consistent policies aimed at protecting workers from any task-specific risks. Although all seven of the platforms we analyzed implemented measures from the beginning of the pandemic (such as the provision of masks and gel), only four were found to provide some form of financial support in cases where workers contracted the disease. Greater efforts are required in this area to match the risks faced by delivery workers and drivers in the course of their work.

Fair contracts

All agreements classify workers as independent contractors, either through an explicit clause on their contract (which normally includes a statement denying any type of regulation by labour law) or through the general framing of the clauses drafted. As a general rule, the contracts or terms and conditions drafted by the companies were found to be easily accessible to workers, both in terms of terminology and language, even though certain clauses were drafted in technical legal language. However, with the exception of one company (Cornershop), we could not find any instance in which platforms cannot unilaterally make changes to their terms.

Fair management

Only three of the seven platforms could be evidenced to have clear communication channels with their workers. There is no fluid and direct contact with managers or executives, and in most of the platforms, once workers are deactivated from the platform, they cannot appeal a decision.

Fair Representation

The principle of fair representation was not achieved by any of the platforms we analyzed. None of them was found to recognize or facilitate the existence of workers’ organizations to generate agreements and review existing working conditions. This leaves gig workers in Chile without mechanisms of formal representation or opportunities to either cooperate with each other or to influence decisions that impact the process of work.

This report establishes a baseline on the current situation of the country’s platform economy that will be updated on a yearly basis. Our findings call for urgent regulation that fits the size and relevance of this burgeoning market, and that addresses its particularities. We call on regulators, platforms, workers, and consumers to use this information to rethink the organization and functioning of this market. This is especially relevant in the context of the COVID-19 pandemic, where unemployment and the economic needs of millions of workers demands a re-imagining of a fairer gig economy for everyone.

A version of the report in English will be available soon.

We want to hear your thoughts on the report, or on our broader work – if you’d like to get in touch, head over to our Contact page, or email us at info@fair.work.