What's Wrong With Rappi, Latin America's Star Of Uberization

Questions are beginning to mount about the fast-growing, tech-based company's business and hiring practices.

Rappi is present in seven Latin American countries.
Rappi is present in seven Latin American countries.
Salomón Kalmanovitz


BOGOTÁ — The billion-dollar startup Rappi is a prime example of the so-called "orange economy" — or creative economy, as it's also known —that Colombian President Iván Duque first championed as an author and continues to prioritize as head of state.

Little wonder that the delivery-service firm campaigned in his favor in the last elections, and that the candidate even appeared in a picture with the orange cap worn by Rappi delivery people. The company reflects the power of millennials, he said.

Rappi, a digital startup founded in 2015, is now present in seven Latin American countries. Tech firms like Rappi tend to outpace established regulations for taxes, social security contributions, work relations and other costs borne by traditional-economy firms. That's how Uber, the private taxi firm, avoids payment of car registration and insurance fees for its "partners' or secretive drivers, while Airbnb gets around hotel taxes when selling short-term flat rentals online.

One might say startups have more of an impact substituting traditional firms than in deepening existing markets. Yes, they reduce costs through economies of scale realized online. But they've also provoked opposition from those who lose out. In various cities worldwide, taxi drivers have launched campaigns demanding that Uber drivers meet the same requirements as taxis, and some cities have gone so far as to ban online cab hailing. Likewise, some cities are restricting flat rentals by global websites, as these reduce the availability of standard rentals while inflating real-estate prices.

They must take into account that this is a new economy.

Recently, Colombia's Trade and Industry Superintendency, which oversees markets and consumer rights, ruled that Rappi was running its online business "irresponsibly." It found that the company does not issue receipts, offers "rappicredits' rather than reimburse money on returned purchases, does not post accurate prices — often concealing additional costs, charges for canceled orders, fails to honor promotional offers, delivers late, mixes up orders, sometimes charges twice for a product, and charges bank cards without authorization.

The firm's "policy director" said he respected the authority, but has warned that "they must take into account that this is a new economy" and should consider how the "negative effects' of regulation could "discourage businesses." Rappi, in other words, should not be subject to the law.

The Labor Ministry, in the meantime, is now having to investigate an even more serious matter: work conditions in these new, "sharing" industries, which bypass all hiring and responsibility norms. Rappi pays nothing toward the healthcare and pensions of its "partners," as its employees are called. Nor does it pay insurance premiums for work accidents, which are frequent among the many cyclists it hires, or offer paid holidays. There is no severance pay either, and no promotion prospects in the firm.

What Rappi does offer its "partners' is: "Passion, Pride and Determination" and the chance to "Get active when you want." Needless to say, these kids will need a lot of that, as they work for just a few hours a day in precarious conditions with no prospects for the future.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

Why This Sudan Coup Is Different

The military has seized control in one of Africa's largest countries, which until recently had made significant progress towards transitioning to democracy after years of strongman rule. But the people, and international community, may not be willing to turn back.

Smoke rises Monday over the Sudanese capital of Khartoum

Xinhua via ZUMA
David E. Kiwuwa

This week the head of Sudan's Sovereign Council, General Abdel Fattah El Burhan, declared the dissolution of the transitional council, which has been in place since the overthrow of former president Omar el-Bashir in 2019. He also disbanded all the structures that had been set up as part of the transitional roadmap, and decreed a state of emergency.

In essence, he staged a palace coup against the transitional authority he chaired.

The general's actions, which included the arrest of Prime Minister Abdalla Hamdok, are a culmination of a long period of tension between the civilian and military wings of the council.

A popular uprising may be inevitable

The tensions were punctuated by an alleged attempted coup only weeks earlier. The days leading to the palace coup were marked by street protests for and against the military. Does this mark the end of the transition as envisaged by the protest movement?

Their ability to confront counter revolutionary forces cannot be underestimated.

The popular uprising against Bashir's government was led by the Sudan Professional Association. It ushered in the political transitional union of civilians and the military establishment. The interim arrangement was to lead to a return to civilian rule.

But this cohabitation was tenuous from the start, given the oversized role of the military in the transition. Moreover, the military appeared to be reluctant to see the civilian leadership as an equal partner in shepherding through the transition.

Nevertheless, until recently there had been progress towards creating the institutional architecture for the transition. Despite the challenges and notable tension between the signatories to the accord, it was never evident that the dysfunction was so great as to herald the collapse of the transitional authority.

For now, the transition might be disrupted and in fact temporarily upended. But the lesson from Sudan is never to count the masses out of the equation. Their ability to mobilize and confront counter revolutionary forces cannot be underestimated.

Power sharing

The transitional pact itself had been anchored by eight arduously negotiated protocols. These included regional autonomy, integration of the national army, revenue sharing and repatriation of internal refugees. There was also an agreement to share out positions in national political institutions, such as the legislative and executive branch.

Progress towards these goals was at different stages of implementation. More substantive progress was expected to follow after the end of the transition. This was due in 2022 when the chair of the sovereignty council handed over to a civilian leader. This military intervention is clearly self-serving and an opportunistic power grab.

A promised to civilian rule in July 2023 through national elections.

In November, the rotational chairmanship of the transitional council was to be passed from the military to the civilian wing of the council. That meant the military would cede strong leverage to the civilians. Instead, with the coup afoot, Burhan has announced both a dissolution of the council as well as the dismissal of provincial governors. He has unilaterally promised return to civilian rule in July 2023 through national elections.

Prior to this, the military had been systematically challenging the pre-eminence of the civilian authority. It undermined them and publicly berated them for governmental failures and weaknesses. For the last few months there has been a deliberate attempt to sharply criticize the civilian council as riddled with divisions, incompetent and undermining state stability.

File photo shows Sudan's Prime Minister Abdalla Hamdok in August 2020

Mohamed Khidir/Xinhua via ZUMA

Generals in suits

Since the revolution against Bashir's government, the military have fancied themselves as generals in suits. They have continued to wield enough power to almost run a parallel government in tension with the prime minister. This was evident when the military continued to have the say on security and foreign affairs.

For their part, civilian officials concentrated on rejuvenating the economy and mobilizing international support for the transitional council.

This didn't stop the military from accusing the civilian leadership of failing to resuscitate the country's ailing economy. True, the economy has continued to struggle from high inflation, low industrial output and dwindling foreign direct investment. As in all economies, conditions have been exacerbated by the effects of COVID-19.

Sudan's weakened economy is, however, not sufficient reason for the military intervention. Clearly this is merely an excuse.

Demands of the revolution

The success or failure of this coup will rest on a number of factors.

First is the ability of the military to use force. This includes potential violent confrontation with the counter-coup forces. This will dictate the capacity of the military to change the terms of the transition.

Second is whether the military can harness popular public support in the same way that the Guinean or Egyptian militaries did. This appears to be a tall order, given that popular support appears to be far less forthcoming.

The international community's appetite for military coups is wearing thin.

Third, the ability of the Sudanese masses to mobilize against military authorities cannot be overlooked. Massive nationwide street protests and defiance campaigns underpinned by underground organizational capabilities brought down governments in 1964, 1985 and 2019. They could once again present a stern test to the military.

Finally, the international community's appetite for military coups is wearing thin. The ability of the military to overcome pressure from regional and international actors to return to the status quo could be decisive, given the international support needed to prop up the crippled economy.

The Sudanese population may have been growing frustrated with its civilian authority's ability to deliver on the demands of the revolution. But it is also true that another coup to reinstate military rule is not something the protesters believe would address the challenges they were facing.

Sudan has needed and will require compromise and principled political goodwill to realise a difficult transition. This will entail setbacks but undoubtedly military intervention in whatever guise is monumentally counterproductive to the aspirations of the protest movement.


David E. Kiwuwa is Associate Professor of International Studies at University of Nottingham

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!