April 10, 2019 / 11:21 PM / a year ago

UPDATE 1-Argentine judge orders crackdown on food delivery firms

(Adds reaction from city government)

BUENOS AIRES, April 10 (Reuters) - An Argentine judge has ordered a crackdown on a fast-growing food delivery sector in the country’s capital Buenos Aires, potentially hitting a lively market which sees colorful bikes and scooters racing around the city to deliver takeout.

According to a bulletin on the Buenos Aires judicial website, the judge ordered the city to immediately halt operations by the three main delivery firms: Colombia-based Rappi, Spanish start-up Glovo and Argentine firm PedidosYa.

But the municipality of Buenos Aires said it would appeal the order, accusing the judge of acting abusively and ignoring local laws that it said authorized delivery operations.

“The government of the city of Buenos Aires should not heed the order because it’s not final and will be appealed,” the city’s transportation department said in a statement.

The judge said that the companies currently were operating in “clear violation of current regulations” and it was necessary to establish strict rules around safety measures for delivery staff, insurance cover and food sanitation.

The fast-growing sector, like Ride-hailing companies, has grown rapidly globally but tends to operate in legal gray areas while negotiating regulatory frameworks with local authorities.

Glovo said in a statement the local industry was facing a “new paradigm” and that the parties needed to find a solution that worked for all. It added the firm hoped the government would keep pushing forward to create a space for dialogue.

The company, which launched in Argentina early last year and says it now has 137 employees in the country, did not comment on whether the order would affect its operations.

Rappi, which launched in Argentina last year, confirmed in a statement sent to Reuters it planned to appeal the decision.

“The resolution issued today affects the entire urban courier industry and home food delivery in the city, putting at risk a source of income for thousands of people,” the firm said.

PedidosYa did not immediately respond to an emailed request for comment. (Reporting by Adam Jourdan, Cassandra Garrison, Maximilian Heath and Walter Bianchi; Editing by Sandra Maler)

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