Towards a fairer platform economy

The government can make history by initiating reforms leading to a fairer platform economy in Pakistan

The last decade saw a massive growth in the platform economy. According to a 2021 ILO report, online web-based platforms have tripled and taxi and delivery platforms have grown almost ten-fold. Fair-work Foundation estimates the size of the world’s gig economy to be between 14 and 55 million workers, with the upper number increasing to 440 million workers, when country-specific estimates are considered.

The gig economy or platform economy is a combination of online/digital marketplaces engaging individuals for short-term tasks, and also referred to as digital labour platforms. The platform economy has two major forms of work: crowd work and work on demand via apps. Crowd work is performed online and is location-independent. It consists of software development, data entry and translation services among others.

The work on demand via apps digitally matches the worker and client. These are location-based platforms with work performed locally. Activities include: transportation, delivery and home services.

Oxford University’s Online Labour Index says Pakistan is the third largest population of professionals in the global crowd work gig industry after India and Bangladesh. Its market share is around 13 percent. A 2018 report by Organisation for Economic Cooperation and Development (OECD) predicted the global proportion of gig workers to be between 0.3 in developing countries and 0.5 percent elsewhere.

In some countries, the estimated range is between 1.5 and 3 percent of working-age population. These estimates and the number of home-based workers in Pakistan allow a safe estimation of more than two million workers (from 72 million labour force) engaged in the platform economy through online services and geographically tethered services.

In the global south, including Pakistan, the platform economy can contribute to employment generation, work formalisation, enable access to new markets and create flexible work opportunities (particularly for women). However, over time the platform economy can also contribute to wage reduction, create precarious employment conditions, prioritise platform and client needs over worker needs and contribute to the growth of gendered division of labour.

Concerns have been raised that platform economy is encouraging a race to the bottom regarding working conditions, particularly in longer working hours (average 65 hours/week in the taxi sector and 59 hours/week in delivery sector), diminished incomes and lack of representation and social protection. This has been further exacerbated by the coronavirus pandemic.

The current deregulation of platform economy is creating a whole generation of unprotected workers. Basic labour protections or universal labour guarantees, i.e., adequate living wages, decent working hours, social protection and safe workplaces should be accessible to everyone irrespective of contract/employment status.

To ensure a fairer platform economy (in line with 2030 Sustainable Development Agenda) in Pakistan, enacting relevant laws or applying the current legislation is a precondition for securing rights for platform workers. At present there is some uncertainty regarding relevant laws. Two major problems are the classification of workers and the applicability of sector-specific regulations.

Platform workers are treated as independent contractors/self-employed rather than employees. This limits their access to basic rights, such as minimum wage, decent working hours, social security and collective bargaining. Moreover, platform companies identify themselves as technology companies connecting independent contractors and users/customers. By using this legal grey zone, the applicability of sector-specific labour regulations becomes quite limited. Nevertheless, there exist certain laws that can be applied to digital labour platforms in Pakistan.

Regulatory authorities can ensure fair wages for platform workers through two major labour statutes: the Industrial and Commercial Employment (Standing Orders) legislation and the minimum wages legislation. Both define a worker in open-ended terms which can include the platform workers, and so, making the platforms responsible for providing minimum wages to their workers.

In addition, the minimum wages legislation calls for minimum rates of wages for all classes of workers, in any category or grade while the payment of wages legislation regulates the payment of all kinds of remuneration. The minimum wage boards, constituted under the minimum wage laws, can notify the minimum wage rates for platform economy workers, especially those in transport, delivery and domestic services.

With one of the most vulnerable group of informal workers now being legally prohibited to be paid anything less than the minimum wage in the Punjab Domestic Workers Act 2019, it is entirely possible to legally establish payment of minimum wage for the significant and ever-growing number of workers in Pakistan’s platform economy.

The Punjab Domestic Workers Act can regulate the payment of minimum wages for workers being serviced by platforms for clients in their homes. The regulation of work and rest hours can be applicable through provincial Shops and Establishments legislation and Road Transport Workers Ordinance, 1961 (applicable to ride sharing and delivery platforms in the Punjab) which set limits on the daily and weekly working hours.

The provision of health and safety conditions for platform workers can be regulated through acts like the Punjab Occupational Safety and Health Act, 2019 which includes protection for the self-employed, Workmen’s Compensation Act 1923, Provincial Employees’ Social Security Ordinance 1965 which provides sickness and injury benefits, Shops and Establishments Ordinance 1969 which allows sick leave, and the Employees Old Age Benefits Act 1976, which stipulates old age pension, invalidity and survivors’ pension for workers. Islamabad Protection of Homebased Workers Bill, already approved by the cabinet, recognised online gig workers and has provisions regarding extension of social security benefits to them.

Many terms and conditions in service agreements that platforms sign with platform workers can limit these workers’ access to their rights and impede their efforts to contest any platform decisions. However, certain legal applicability can exist through the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968, Road Transport Workers Ordinance, 1961 and Punjab Domestic Workers Act, 2019. These oversee the presence of rightful terms and conditions in agreements, such as having a written contract with work hours, employment termination process and the undertaking of liability by the platforms. The Provincial Consumer Protection Acts can be used here as well to ensure platforms take liability for their actions regarding their workers (also consumers of their technology).

In case of any grievances raised against platform workers, there can be cases of arbitrary deactivations, penalties and disciplinary actions without the ability to appeal against such. The Punjab Industrial Relations Act 2010 provides a grievance redressal process and the Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 legally prevents any dismissal of a worker without a due process.

Furthermore, the labour legislation in Sindh and Khyber Pakhtunkhwa protects all classes of workers against discrimination on the basis of religion, sex, political affiliation, sect, colour, caste, creed, ethnic background. Other laws that can apply to the platform economy include Protection Against Harassment of Women at the Workplace Act, 2010 in Punjab, Punjab Disabled Persons (Employment and Rehabilitation) Ordinance, 1981 and ICT Rights of Persons with Disability Act, 2020.

To have fair representation, the constitution provides the fundamental right of freedom of association for all workers. Moreover, the Punjab Industrial Relations Act, 2010, allows the workers the right to organise, to collectively bargain by specifying the functions of a collective bargaining agent and method of determination of a collective bargaining agent, and also gives workers the right to set up a works council, thereby enabling platform workers to play a meaningful role in governing the platform. In addition, the 2010 Act prohibits any unfair labour practices against workers involved in trade unions, therefore encouraging the expression of workers’ collective voice.

For the platform economy to evolve in an inclusive and sustainable way, progress in regulating the rights of platform workers, through legislation, and a social dialogue among the relevant stakeholders, especially digital labour platforms, platform workers and the government, is essential. The government can make history by initiating necessary reforms, leading towards a fairer platform economy in Pakistan.

Athar Jameel is the communications and outreach director at the Centre for Labour Research. He can be reached at:

Shanza Sohail is the senior research associate at the Centre for Labour Research. She can be reached at:

Towards a fairer platform economy