Like many SoftBank-funded start-ups, Rappi not only depends on contractors to deliver its services but also offloads its fixed costs — and the risks of the work — onto them.
The company, established in 2016 by three Colombian entrepreneurs, harnesses bike and motorcycle riders to deliver everything from flowers to cash from the A.T.M. In Colombia alone, it has 20,000 couriers.
This year, SoftBank gave Rappi $1 billion — twice as much as what the company had gotten from all its previous investors combined. In announcing the funding, SoftBank declared that the start-up, which it valued at $2.5 billion, would be responsible for “improving the lives of millions in the region.”
SoftBank’s money has helped Rappi expand into nine South American countries. And the company initially offered drivers 3,500 pesos, or around $1, for every delivery — enough to earn more than Colombia’s minimum wage of around $8 a day.
In return, couriers provided their own cellphones, bikes and motorcycles. They had to buy a Rappi delivery bag, which costs around $25. And they have to shoulder most of the physical risks of delivery.
In August, a judge in Argentina ordered Rappi and two other delivery services there to shut down until they provided workers with insurance and safety equipment like helmets. The judge said 25 couriers had been treated in Buenos Aires public hospitals over the previous month.
Rappi said it would appeal the decision, which it said “puts at risk the continuity of thousands of people’s income.” It has continued sending riders out on the streets.
In September, a survey of 320 Rappi couriers in Colombia, conducted by the University of Rosario and several nonprofits, found that nearly two-thirds had been involved in an accident on the job. Almost none were covered by insurance.