Uber's Brazilian business is having a terrible week. And it's only Wednesday.
On Monday, Brazilian Judge Marcio Toledo Gonçalves ruled that Uber drivers are employees who are entitled to workers’ benefits. Gonçalves ordered the tech giant to pay one driver approximately 30,000 reais ($10,000) in compensation to cover overtime hours, night shifts, holidays, and other expenses.
The ruling could threaten Uber’s business model in the Latin American nation that—like its operations elsewhere—hinges, in part, on being able to classify its drivers as contractors. Uber said on Tuesday that it would appeal the decision, repeating its long-held stance that drivers are independent contractors, rather than employees.
The Brazilian case is one fight in a string of legal battles related to Uber's employee benefits, price fixing, and safety. And it's the second piece of bad news Uber received about its Brazilian business in as many days.
On Tuesday, Reuters published an analysis of crime data in Sao Paulo and found disturbing statistics on the robberies and murders of Uber drivers. Its investigation revealed that robberies of Uber drivers in Brazil's largest city rose ten-fold and attacks of drivers increased from an average of 13 per month in the first seven months of 2016 to 141 per month for the rest of the year. It's important to note that Brazil is not an easy (or safe) market to crack. The country has one of the highest homicide rates in the world.
All this came after Uber's announcement in January that it's launching a support center in Sao Paulo. With a plan to invest $62 million and create 2,000 jobs, the center is meant to provide technical support for Uber's 9 million users in the country. Uber's planned expansion in the country followed news that its Brazilian rival, an on-demand taxi service called 99, received a $100 million investment from Chinese ride-sharing giant Didi Chuxing.
Brazil is crucial to Uber’s global expansion efforts because the market is Uber’s third biggest business after the U.S and India.