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Livery Insurance – Ride Sharing Insurance- Drivers Status

The Brazilian High Labor Court ruled Wednesday that no work arrangement exists between Uber and its Sao Paulo drivers. This is major news in the industry for livery insurance.

Brasilia’s Federal judge ruled that Uber drivers are able to disconnect from the app at any time and hold a choice based flexible working schedule.

To date, lower courts have ruled on labor questions involving Uber, but a federal court’s decision is expected to set the legal standard. This decision, although not binding, may influence similar cases going forward across the country.

Uber accepted the verdict, stating in a public statement that it has endorsed hundreds of previous decisions. These decisions confirm that its drivers are not employees, but independent contractors under Brazilian law.

Uber argued its business model operates as a digital broker, not an employer. Drivers acknowledge this when they register for the app.

Brazil would be Uber’s second-largest market, after the United States. Sao Paulo is the top city for Uber rides, surpassing New York by volume.

The company stated that the court recognized its platform’s creative nature, partnering with over 600,000 drivers across more than 100 cities. Uber serves millions of riders in Brazil, making it a crucial market for their international operations.

Breno Medeiros, a federal labor judge, found that drivers’ wide flexibility in choosing when and where to operate was incompatible with an employer-employee relationship. This flexibility is seen as an indication of their independent contractor status.

Medeiros further explained that drivers’ take-home pay, between 75% and 80% of the total fare, was sufficient to define Uber’s relationship with them as a partnership. The compensation structure reinforced the lack of a traditional employment bond.