MEXICO CITY, Mexico — Delivery workers and drivers for digital platforms such as Uber have won presidential backing for sweeping new rights in Mexico after the government said it would overhaul its labor laws.
Unions hailed the reforms as a big win for more than 600,000 underpaid, under-protected workers, saying the announcement could have a domino effect across the region.
Currently, app-based workers are considered “partners” of popular apps such as Uber and Rappi, so are denied the labor rights that are accorded other workers in the country.
But on Thursday, President Claudia Sheinbaum said she would introduce a reform to the Federal Labor Law—which has not been updated to include digital employment—in a move that will extend its many benefits to app workers.
“It’s a historic win that can have a positive impact in other Latin American countries, because it recognizes the labor relationship between workers and companies,” said Sergio Guerrero, leader of the National Union of App Workers (UNTA), which represents 3,000 gig workers across the country.
Under the proposed reform, the government will roll out a pilot program granting social security to any app-based worker who earns at least the minimum wage.
The new benefits will include access to public healthcare, sick leave, housing credits, daycare, paid maternity leave, retirement and insurance against job risks.
The reforms will be presented in the lower house of Congress in coming days, where the ruling party has a majority and little opposition is expected.
Hazards of app life
According to the national tax authority, nearly 658,000 people are employed through digital platforms, 41 percent of whom earn more than the minimum wage of 248.93 pesos ($12.80) a day.
Workers earning less than the minimum wage, and who might not be working full time for an app, will still have access to insurance for any on-the-job injuries, Labor Minister Marath Bolanos told a press conference on Thursday.
The proposal would restrict the new insurance benefits to the times when workers are actually delivering an order or providing a service.
But the UNTA workers’ organization said it would push to extend protection to include those times when workers are waiting for an order so they still risk road hazards.
“You wait for orders in the street, which is not a safe environment. Workers also mostly live in the city’s periphery and suffer many accidents when driving from home from work,” Guerrero told the Thomson Reuters Foundation.
To register for social security, drivers and couriers will not be forced to work full time for the apps nor restricted to work for any one single platform, two of the workers’ key concerns during the two years of negotiations.
“(This reform) maintains workers’ freedom, which means that they can define the hours they will be connected to the platforms,” said Bolanos.
In response to workers’ demand for algorithmic transparency, companies will also have to introduce contracts where the “rules of the algorithm are clearly explained.”
Labor activists say gig workers are subjected to automated decisions that are hard to grasp and near impossible to challenge but which can hold great sway over job opportunities, ratings and earnings.
Algorithms can even opt to terminate an account, say if a worker opts to prioritize a childcare crisis over a client or if a courier is suspected by AI of fraud.
Before blocking a worker’s account, a person—not a computer—will now have to review the termination order and ensure that no gender bias is at play.
Before the reform is introduced to Congress, representatives of digital platforms are seeking to meet with the labor minister and discuss the final text, which has not been made public.
“Government and industry agree that it is important to give people the option of social security under a scheme of flexibility and independence, but we need to be careful on how to do it,” said Guillermo Malpica, director of the Alianza In group founded by Uber, DiDi, Rappi and Cabify.
These four platforms run most of the ride hailing and food delivery market in Mexico, which has a projected revenue of $2.6 billion and over 44 million users by 2029.