Super-apps like Grab and Gojek are centralising and formalising Indonesia’s informal labour market. What problems are associated with this? And what does this teach us about the gig economy worldwide? Martijn Arets explores in The Gig Work Podcast.
Working via online platforms is on the rise all over the world, but the debate on the gig economy is mostly focused on the western world. To get a more complete picture, it is good to take a look at countries with a different institutional landscape. For example, Indonesia.
This summer, I travelled through this particular island state for six weeks and ordered taxis dozens of times via Asian platforms Gojek and Grab. These ‘super-apps’ offer numerous services on a single platform: from taxi rides to meal and grocery delivery, from cleaning to financial services. They are wildly popular and you can see this on the streets. In big cities like Jakarta, Surabaya and Yogyakarta, a sea of men in green jackets on motorbikes.
What does the gig economy mean for Indonesian (platform) workers? To find out, I spoke to Suci Lestari Yuana, PhD researcher at Utrecht University and working in the Department of International Relations at the Faculty of Social and Political Science at Gadjah Mada University in Yogyakarta, Indonesia.
Informal labour as the backbone of society
Yuana has had a fascination with the platform economy and its impact on the labour market since 2015. She researched developments in both the Netherlands and Indonesia. “European colleagues see informal labour and undeclared work as inferior,” she says. “They immediately look for ways to formalise work. In Indonesia, we think very differently about the informal economy: it is not inferior, it is the backbone of society.”
In Indonesia, there are far more people in informal than formal jobs: some 65% of the population works without formal regulation, legal protection or official registration (2023). “The government is unable to create sufficient employment in the formal economy,” the researcher says. “Daily life depends on informal employment. This is true for more countries in the global south.”
From formal job to gig worker
Platforms are digitising this informal economy. Platforms like Gojek and Grab promise higher pay and more work. So the fact that the platform economy is flourishing in Indonesia is actually not that surprising. Since the rise of online work platforms, informal work has become more visible and valued.
That the informal economy is getting more structure and status is positive, but there is also a downside. “The beautiful promises of the platforms lead people with formal jobs or higher education degree to work as gig workers,” Yuana explains. “This is at the expense of the original taxi drivers and meal delivery workers, who often do not have an entry-level qualification. In short, they make the informal economy become even more competitive for the informal workers.”
Moreover, the platforms often fail to deliver on their fine promises, she says. “For example, they advertise salaries of 700 euros a month, four times the minimum in Jakarta. In practice, this is often disappointing, because this income tied to performance based bonuses, making it an unpredictable rollercoaster ride for the drivers.”
Lack of long-term vision
Yuana researches debates and conflicts related to the gig economy in Indonesia. “Discussions and protests tend to focus on short-term gains,” she says. “This is so in more other poorer countries in the southern hemisphere. Workers’ organisations in Indonesia, for example, mainly make the case for higher tariffs, but not for better working conditions.”
According to Yuana, the government does not think enough about the long term. This is not a new problem, she explains. “For example, transport via motorbike taxis is not legal, but it has been tolerated since the 1970s. There are no laws and regulations because the government actually considers this kind of taxi transport is unsafe. But enforcers do not act against it either, because there is no decent alternative public transport yet. As they said, motorbike taxi is a mode of transport in transition. But the question is, until when?”
Platform workers at the table
Changing government policy is difficult, but she and her fellow researchers are doing their best. For instance, they organise meetings and seminars on the platform economy, where they are not afraid to voice criticism. They advocate for more regulation of the platform economy to improve working conditions and give more people a fair chance to work.
According to Yuana, it is important to take into account the dramaturgy elements into the consideration of decision-making process. For example, in enacting regulation for gig economy, platform workers have to get seats during discussions that concern them. “To achieve workable laws and regulations, all voices need to be heard. The worker is still too often overlooked. Of course, we scientists know a lot about platform workers, but I don’t feel I could speak on their behalf.”
That seat at the table is increasingly available. At a Transport Ministry meeting on possible regulation of motorbike taxis, for instance, platform workers were also present.
Wishes of workers
What do platform workers want in Indonesia? Yuana researched the needs of taxi drivers and other stakeholders working through the digital apps. She discovered 19 criteria, which she will soon publish in her research paper. Only four of these are purely technical. “Most of the criteria are about positioning taxi platforms within current and future social, economic and legal conditions,” she says. “How can we ensure that customers are better protected? In what ways can we ensure that drivers have better incomes and fairer working conditions?”
Yuana sees a joint task for government, science, platform workers and platform companies to make this happen. Are you starting a platform that brings together part of the informal labour market? Then first involve the people who were already working in it,” she says. “It is not fair to lure away people who already had formal jobs with the often empty promise of a nice salary.”
More equal discussion
Yuana is also exploring how platform workers can have more influence during a discussion with the government. “First, group size matters. The better platform workers unite, the better they are heard,” she says.
Furthermore, from dramaturgy point of view, it matters which place in the room someone sits. Yuana: “If there are two rows of chairs, the people in the front row often have the most to say. These kinds of insights are valuable both for the platform workers themselves and the organisations that organise these kinds of meetings. With this, we can ensure a more equal discussion.”
Lessons from Indonesia
I learnt a lot from Yuana and my six-week trip through Indonesia. As in other countries, job platforms in Indonesia present themselves as new and different, while merely facilitating existing work through a digital platform. The name ‘Gojek’ is even derived from the existing word ‘Ojek’, meaning ‘motorbike taxi’. It is remarkable that policymakers fall for this so easily.
That job platforms are popular in countries like Indonesia is quite logical. After all, personal services such as motorbike taxis are already commonplace there. In addition, there is high unemployment, so more and more skilled people are also offering their services via the platforms. In short, there is talk of perspective. This is a topic that, in my opinion, is too often missing in discussions about the gig economy.
Thanks to the conversation with Yuana, I look at developments in the platform economy with new eyes. The way southern countries view the informal economy is particularly interesting. In a large informal market, workers may be more resilient to the gig economy because they are already used to organising informally. This is confirmed by members of the WageIndicator team in Jakarta. They told me that meal delivery workers keep in close touch via WhatsApp groups. If something is wrong with someone, there is a swarm of green jackets around them in no time.
While I feel delivery drivers are stronger because of their solidarity, it is difficult to stand up to platforms. Apps in Indonesia are increasingly becoming ‘super-apps’ with different services. For instance, you can not only order a taxi, but also have groceries delivered, see a doctor, send packages or hire a handyman. Easy for customers, but it also means that workers are becoming increasingly dependent on the apps. Indeed, it becomes harder to build your own customer base apart from the app. That is another argument for more government regulation. In this respect, Indonesia still has quite a few steps to take.