Indonesia’s gig workers are living precariously. Can we fix the platform economy?

Indonesia’s gig workers — who navigate the digital marketplace as delivery personnel, ride-hailing drivers or online freelancers — are in an increasingly precarious position. They are essential cogs in the gig economy but often lack the safety nets traditionally associated with formal employment.

This fast-paced world that fuels the gig (or platform) economy comes with a hidden cost for Indonesians: a lack of protections for the very people driving its growth – the gig workers themselves.

Can we fix the gig economy?

The plight of gig workers

Globally, the gig economy presents the challenge of balancing low service costs for consumers with fair treatment for workers. Typically, lower service costs come at the expense of worker well-being, while higher costs reflect better working conditions through collective action.

Indonesia’s gig sector has grown substantially since the emergence of ride-haling apps like Gojek and Grab. It employs about 2.3 million Indonesians and contributes US $7 billion to the country’s GDP. The gig economy is an urbanisation phenomenon . With cities growing and predictions that by 2050, 70% of the world’s population will live in urban areas, the size of Indonesia’s economy will continue to grow.

But in recent times, customers’ perceptions about the labour practices of food delivery platforms have begun influencing usage behaviours among socially conscious consumers. Social media plays a role in shaping public attitude towards gig workers in Indonesia. Its netizens have been outspoken in expressing progressive positions on issues like inequality, poverty, sexual violence and actions that violate societal norms. The plight of gig workers, represented mainly by underpaid online motorcycle taxi drivers (“ojek online”) and unpaid internships, frequently sparks debate on Indonesia’s social media – and sometimes collective outrage.

Public demand for better treatment of gig workers has clearly exposed their precarity, stemming from the fact they are not considered workers by the platforms for which they work.

Instead, most gig workers are classified as independent contractors or ‘partners’. Consequently, they are denied rights under labour and social security regulations due to their status as non-workers. This excludes them from the protections of Indonesia’s Labour Law.

Furthermore, platform algorithms and competition can lead to unpredictable earnings, making it difficult for gig workers to make ends meet. Many gig workers are forced to work long hours to secure a decent living, particularly in the delivery sector. Some work over 100 hours per week to secure a living wage. These challenges are compounded by a lack of proper insurance coverage for work-related accidents, leaving them without guaranteed minimum wage, health insurance, or paid time off. Additionally, women in the gig economy face the added burden of potential harassment and discrimination from customers.

Fixing the gig economy

Fixing the gig economy will require a multi-pronged approach.

One solution lies in creating a new category of worker, a hybrid classification that acknowledges the unique nature of the gig economy but still offers basic protections like minimum wage guarantees, and portable benefits systems that allow them to contribute to social security and health insurance. This could provide much-needed security for the digital precariat.

Policymakers could also impose standardised platform agreements with minimum requirements for fair treatment and transparent pay structures that empower – rather than exploit – gig workers.

Consumers also have a role to play. By being aware of labour practices on different platforms and choosing those with a strong track record on worker rights, they can put pressure on the industry to improve.

But more effective solutions may come from the gig workers themselves.

One breakthrough approach would be to create a cooperative platform system – a gig economy built and owned by the workers themselves.

Imagine a gig economy where workers aren’t just “partners,” but co-owners. Co-operative platforms – online marketplaces owned under by members – can empower gig workers by giving them a direct stake in the platform’s success. Decisions on pay structures, working conditions and platform development are made democratically, ensuring fair treatment for all worker-owners.

The idea of a cooperative economy in Indonesia is not new – cooperatives were widely promoted by Indonesia’s first Vice President, Mohammad Hatta. Given the sheer size of Indonesia’s gig economy, it is feasible for gig workers to unite and shift to a more cooperative model.

In view of the precarity and economic dependency of gig workers, platform co-operatives come into the picture as alternatives to investor-owned platforms. This shift in power prioritises worker well-being over pure profit, potentially leading to fairer wages, better benefits packages and improved safety measures.

Another pathway towards a more balanced gig economy lies in fostering collaborative networks for gig workers through the establishment of formal unions. Networks of gig unions, similar to the traditional concept of worker associations, could also overcome challenges of the platform economy, empowering gig workers to transcend their individual roles and build a collective voice, fostering a sense of community and shared purpose.

By unionising, gig workers would no longer be isolated and voiceless in Indonesia. Gig unions would empower them to band together, creating a collective bargaining force capable of negotiating with platform companies. This united front would address pressing issues like minimum wage, healthcare benefits and fair treatment. Standardised contracts with clear terms and conditions could be advocated for by these unions, ensuring transparency and protecting gig workers from exploitation.

Additionally, gig unions could push for improved working conditions through collective action. This could include limitations on working hours, access to safety training and clearer policies on dispute resolution – crucial safeguards currently missing in the gig economy.

Moving forward

The Indonesian gig economy has the potential to be a win-win for both workers and companies, but only if it’s built on a foundation of fairness and dignity. Law reform, gig cooperatives and gig unions offer a path towards achieving this balance.

Ultimately, a thriving gig economy in Indonesia depends on achieving a delicate balance – fostering innovation and flexibility while ensuring that workers are protected. The rise of collaborative networks  could transform the landscape from one of vulnerability to one of empowerment.

Exploring a different model of gig economy presents a unique opportunity to unlock its potential, making it a force that could enable shared prosperity in Indonesia. Only then can the country achieve the goal of dignified development that humanises and benefits its people.