On 5 December 2024 a São Paulo labour appeals court recognised an employment relationship for all iFood couriers and ordered R$10 million in collective damages, resting its reasoning on one economic fact: couriers negotiate neither the fee nor the order of deliveries. A right to know how the algorithm distributes work, by contrast, does not yet exist in Brazil — it lives in ministerial announcements and in a Supreme Court case that keeps slipping.
The decisive line in the ruling that shook Brazil’s delivery market on 5 December 2024 is not a thesis about algorithmic transparency. It is far drier: couriers negotiate neither the value of a delivery nor the sequence in which deliveries are carried out. From there the 14th Panel of the Regional Labour Court of the 2nd Region — the labour court covering Greater São Paulo — derived everything else, upholding the appeal of the Labour Public Prosecutor’s Office, recognising an employment relationship for all couriers working with iFood, and ordering the company to pay R$10 million in collective moral damages, with a daily fine of R$5,000 for non-compliance. The reporting judge was Ricardo Nino Ballarini; case number 1000100-78.2019.5.02.0037. The ruling reverses a 2020 first-instance decision in which the 37th Labour Court of São Paulo (Judge Shirley Aparecida de Souza Lobo Escobar) had dismissed the public civil action.
Where the artificial intelligence actually sits
The system at issue is a delivery platform’s dispatch engine: a combination of machine learning models and optimisation rules that decides, in real time, which order to offer to which courier. It works on GPS location data, historical and forecast demand density by zone and time slot, estimated restaurant preparation times, traffic conditions, and the past behaviour of each individual courier — how many offers accepted, how fast, how often disconnected. It produces two things: an assignment and a price. Both reach the courier already decided, in a notification to be accepted or declined within seconds.
As for the criteria, iFood publicly states that distribution takes into account proximity to high-demand areas and “good use of the app”, summarised in an internal Score; since June 2026 the company says it has added a road safety indicator, “Direção Segura”, among the factors weighing on assignment. These are operator statements, not audit findings. And here lies the gap between how the São Paulo ruling has often been described abroad and what it actually says: the panel granted couriers no right to know the algorithm’s criteria. It used the opacity of assignment as evidence of the opposite of transparency — of subordination.
An economic argument, not a technical one
This distinction matters, because it changes entirely the kind of risk a company has to book. A right to algorithmic transparency generates disclosure duties: publish the parameters, justify account deactivations, open a channel to challenge them. That costs money, but it is compliance cost — foreseeable, budgetable, amortisable. Recognition of an employment relationship generates a retroactive liability instead: social contributions, paid leave, the statutory thirteenth salary, overtime, accident insurance, for a population the company never accounted for as staff.
The São Paulo court took the second route, with an argument that says nothing about code. Economically, a market exists when two parties bargain over a price. If one of them receives the price already formed by a system it cannot see or contest, and receives the work sequence too, that party is not a business: it is a factor of production organised by someone else. The argument is as old as labour law, applied to new infrastructure. And it is far harder for a defence team to dismantle than a dispute over the model’s technical details, because it does not require opening the black box: it is enough to watch what comes out of it and who is on the receiving end.
Why the bill has not arrived
iFood announced an appeal, arguing that the decision conflicts with other rulings by the same regional court and creates “legal insecurity” for the whole delivery sector; it intends to take the case up to the Superior Labour Court and the Federal Supreme Court. There is no indication that the award has become enforceable: nobody has paid, and nobody has been hired.
The real knot lies elsewhere, and it is stuck. On 2 March 2024 the Supreme Court unanimously recognised general repercussion in Theme 1291 (RE 1,446,336, an Uber appeal, reporting justice Edson Fachin) — the proceeding that will determine whether an employment relationship exists between platforms and workers at all. The report and oral arguments took place on 1 and 2 October 2025. No vote on the merits has been cast, and postponements have piled up: at the session of 27 August 2026 the case was not even called. Scheduled alongside Theme 1291 is Reclamação 64,018, filed by Rappi against a decision recognising an employment bond with a courier, reported by Justice Alexandre de Moraes. On 30 September 2025 Prosecutor General Paulo Gonet filed an opinion against recognising the relationship.
Meanwhile the Superior Labour Court offers no compass. Its 6th Panel recognised an employment bond with Rappi in 2022 (reporting justice Kátia Magalhães Arruda); the 3rd Panel did the same with Uber that year; and on 23 December 2024 a single-judge decision by Justice Liana Chaib rested explicitly on subordination to the algorithm and on gamification. Other panels rule the other way. The Supreme Court, for its part, has precedents cited in the opposite direction — ADC 48, ADPF 324, RE 958.252 — and in December 2023 it asked the National Council of Justice about labour rulings that depart from them.
Waiting already has a market price
This is the part that matters to anyone reading a balance sheet. Litigation pending for years before the constitutional court, with opposite outcomes in lower instances, is not a risk of unknown probability: it is a risk that must be provisioned, disclosed to investors, discounted in valuations. Every Supreme Court postponement does not reduce the risk, it extends it — and extending it carries a cost of capital that appears in no judgment. Paradoxically, in this scenario even a strict but clear regulation would be worth more than a favourable uncertainty.
But there is no regulation. Bill PLP 12/2024, sent by the executive to Congress on 5 March 2024 under constitutional urgency (urgency later withdrawn in April), covers ride-hailing drivers, not delivery couriers; by May 2025 the Senate was registering a lack of consensus. For couriers the discussion stayed separate and unresolved. On the administrative front, on 14 September 2026 Minister Guilherme Boulos, of the Presidency’s General Secretariat, announced a sub-statutory instrument — a decree or ministerial order — on the transparency of ride-hailing and delivery app algorithms, including mechanisms to contest automated blocks. That is an announcement: no publication has been confirmed. Separately, the government asked iFood for clarifications on its “Mais Entregas” mode — pay, hours, autonomy, distribution of deliveries — and the company replied that joining is voluntary and that no courier earns below the hourly minimum wage.
What is left on the table
Observers in Europe tend to read Brazil as a country that will eventually arrive where others have, with some form of duty to explain automated systems. So far the Brazilian path has run exactly the other way: the judicial lever that actually bit does not ask the algorithm to explain itself, it challenges the algorithm’s right to operate in its current form. The demand for transparency — the thing that would make a Score, an automated block or a safe-driving rating contestable — travels on a far weaker administrative track made of announcements and requests for clarification.
There is an asymmetry worth noting. If the Supreme Court denies the employment relationship, platforms will be left with no transparency duties at all, because none has ever been established by any court. If it recognises the relationship, transparency becomes almost beside the point: you do not ask an employer to justify how it allocates shifts, you ask it to pay for them. In both scenarios, the right to know how the algorithm decides — the very thing Brazil’s public debate treats as the heart of the matter — risks being the one thing nobody gets.