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May 27, 2019

Protecting the gig economy

Opinion

May 27, 2019

Gone are the days when people used to work in an enterprise for decades and leave only on superannuation. With the advancement in technology, various kinds of digital labour platforms have sprouted in recent years.

The phenomenon is generally referred to as the gig or platform economy. The gig economy is a combination of online/digital marketplaces for engaging individuals for short-term tasks. These mini marketplaces are also referred to as digital labour platforms. It represents nonstandard forms of employment where it is difficult to assess whether the relationship governed by digital labour platforms is autonomous or subordinate in nature. Independent contractors or affiliates, terms used for those working with platforms, have no access to the workplace rights available to a worker in a ‘subordinated’ employment relationship.

The platform economy distinguishes between two major forms of work: crowd work and work on demand via apps. Crowd work is performed online and is location-independent. It includes software development, data entry, translation services, etc. Examples are UpWork, Fiverr, and Freelancer.

‘Work on demand via apps’, on the other hand, matches the worker and the client digitally and the work is performed locally. Activities include transportation, food delivery and home services. Major platforms in Pakistan include Uber, Careem (transportation), and Foodpanda (food delivery).

According to Oxford University’s Online Labour Index, Pakistan is home to the third largest population of professionals related to the global crowd work gig industry after India and Bangladesh. Its market share is nearly 13 percent. On the other hand, while no clear numbers are available, there are tens of thousands of drivers and riders engaged with ride-sharing and delivery platforms.

Platform or sharing economy workers are generally young workers. The nature of work, especially crowd work, allows women, persons with disabilities and rural workers who were earlier excluded from the labour market due to a variety of reasons. Digital labour platforms also make looking for work easier.

The Institute for Labour Rights conducted interviews of 150 ride-hailing platform drivers/captains in Karachi and Islamabad in April and May 2019. Some insights are worth sharing. First, while most were driving their own vehicles, a considerable number was engaged on employment by some fleet owner. Second, none of the drivers conceded that they signed any agreement with these platforms for provision of services. This shows lack of information on the part of the driver/captain since agreement is shown in the app while they are registering themselves. It might be helpful that workers are made to sign this agreement at local platform offices in Urdu.

Third, a majority of drivers/captains informed that driving with these platforms is their main source of income and for some the only source. Fourth, it was found that the average working hours are 12 hours per day and more than 75 hours per week without any weekly day off. Under employment legislation in Pakistan, the general working hours are 8 hours a day and 48 hours a week. Fifth, while platforms require vehicle insurance, 90 percent of the vehicles were not insured, leave alone driver and customer insurance.

Sixth, the average monthly earnings are around Rs50,000 inclusive of bonuses – though many complained about the constant reduction in the amount of bonus. The wages of employees of fleet owners were Rs20,000 as well as 20 percent of the bonus. Seventh, while there is no association or trade union of these drivers, most were in touch with others through WhatsApp groups. Eighth, nearly all workers were aware of the fact that local employment legislation is not applicable to their work. Ninth, while all interviewed subjects liked their autonomous status (be your own boss, work whenever you want), they all wanted to have access to minimum workplace rights including maximum working hours, social protection in the event of an accident/injury, life and health insurance, sick leave and paid annual leave.

Tenth, a majority of workers referred to insufficient availability of work due to increased supply of cars/captains in the ride hailing service. Thus, in order to complete target rides to earn bonus, the number of working hours per week are on the rise. Finally, they also talked about work-related stress due to always being on call and working anti-social hours like weekends and nights. The quest for meeting the target is presumably affecting work-life balance for the majority of workers. The ‘surge pricing’ mechanism was considered equivalent to forced overtime. A considerable portion of interviewed ‘employee’ drivers also indicated that working with these services is an upgrade for them in terms of pay and working conditions, especially when driving an air-conditioned car.

Interestingly, what started as part-time, flexible, ‘supplementing your income’ work has now become full time work for tens of thousands of people. While apparently there is autonomy, many working in the platform economy feel they are governed by an invisible hand, the algorithm. The algorithm simply ‘de-activates’ a rider or delivery person when consumer rating drops below a certain level. Thus, there are concerns that the gig economy is encouraging a race to the bottom in working conditions, especially in terms of working hours, reduced incomes, and lack of representation and social protection.

The Mazdoor ka Ehsaas Programme, launched by Prime Minister Imran Khan on the eve of Labour Day, aims to provide social protection to the informal economy workers. Gig economy workers are part of a larger informal economy without access to any social protection benefits. There is a dire need to make the gig economy fairer, in line with the 2030 Sustainable Development Agenda. Requiring digital labour platforms to register their workers aka independent contractors with social security institutions and EOBI could be the first step in that direction. Otherwise, a new institution to provide social security benefits to the informal economy workers can be created at the national level. Health benefits can be provided through state-run hospitals by diverting funding from these contributions to the provincial health departments.

Of all the informal economy workers, the gig economy and construction sector are the easier ones to regulate as their work is already documented, more visible and structured than domestic or home-based work. Deregulation of the gig economy is hurting the economy and society as a whole by producing a whole generation of unprotected workers. Basic labour protections, adequate living wages, working hours, social protection and safe workplaces should be available to everyone irrespective of contract/employment status.

The writer is the founder of the Institute for Labour Rights (The Whistlers).

Email: [email protected]

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