Uber Rejects Brazilian Court's Ruling To Pay $205 Million Fine

Ride-hailing service provider, Uber, rejected a Brazilian labor court ruling on Thursday, which required the company to pay $205 million (1 billion Brazilian Real) as a fine for irregular working relations with the drivers, who are using the app.

The São Paulo state court ordered Uber to work on its employment relationships, and pay each unregistered worker a penalty of 10,000 Brazilian Real, Reuters reported.

The sentence came after a lawsuit was filed against Uber in November 2021 with Brazil's public prosecutor's office, accusing the company of controlling the manner in which professional activities are conducted, "which constitutes an employment relationship."

However, the court's ruling was rejected by Uber, which added they would appeal this decision, and not pay the fine or adopt any listed measures in the sentence before exhausting all applicable resources.

"There is evident legal uncertainty," Uber said in a statement, MoneyControl reported.

Uber was officially launched in Brazil's São Paulo in May 2014. Soon, the company expanded its services in many other cities, across the country.

It has become one of the most popular modes of transportation in many Brazilian cities as it provides not only ride-sharing service but also food delivery services via the Uber Eats platform, which was launched in December 2016.

Previously, Uber came under fire in 2019 in Brazil related to labor rights. The company won the case, as it classified Uber drivers as independent contractors and not employees.

Uber argued in court at that time that drivers can disconnect from the application anytime, and have flexible work timing. On top of it, Uber said it was just a digital platform and not an employer, adding that drivers accept this condition before working with the company.

Federal labor judge named Breno Medeiros considered the flexibility drivers get, in terms of choosing the hours they work and the number of customers they cater to, making it "incompatible" to call it an employer-employee relationship.

Furthermore, the judge noted that drivers take somewhere between 75-80% of the total fare. Hence, drivers' relationship with Uber was characterized as a partnership.

Brazil has become the biggest market for Uber, following the United States. The platform works with more than 600,000 drivers in more than 100 Brazilian cities, serving over 22 million people, as per Reuters.