Significant downturn in e-hailing as pandemic hits gig economy: report

'Financial precarity' on the rise in SA, says new study of digital labour platforms

08 July 2021 - 11:56
An estimated 30,000 workers in SA are engaged in location-based platform work like taxi driving, delivery and cleaning. Stock photo.
An estimated 30,000 workers in SA are engaged in location-based platform work like taxi driving, delivery and cleaning. Stock photo.
Image: 123RF/ammentorp

Unpaid labour-time for SA gig economy workers has worsened as they face an uncertain and risky work environment, amplified by the Covid-19 pandemic.

This is according to a report that evaluates the working conditions in 12 of the most popular digital labour platforms in SA, including Uber, Bolt, SweepSouth and Mr D.

“A vast majority of gig workers faced financial precarity during the Covid-19 pandemic,” said the report.

To understand the state of gig work in SA, Fairwork, a collaboration between the universities of Oxford, Cape Town, the Western Cape and Manchester, assessed 12 of the country’s largest digital labour platforms against five principles of fairness — pay, working conditions, contracts, management and representation — giving each a fairness rating out of 10.

According to the report, digital labour platforms hold the potential to reduce SA’s sky-high unemployment and inequality, with an estimated 30,000 workers engaged in location-based platform work like taxi driving, delivery and cleaning.

GetTOD leads the 2021 table of labour platforms, according to the report, with nine points, while M4Jam, SweepSouth, and NoSweat are tied in second place with eight out of 10 points.

The report says that six out of 12 platforms guaranteed at least the minimum wage.

“However, when workers’ expenses (such as petrol, transport costs and waiting times) were taken into account, evidence could only be found that six out of the 11 platforms paid workers above the minimum wage. Only three of the platforms included in the ranking demonstrated evidence of workers earning above the current living wage of R41/hour,” said the report.

Prof Jean-Paul Van Belle, of the department of information systems at UCT, said work in the gig economy is often unsafe and insecure.

“Workers lack protections afforded to regular employees and are vulnerable to unfair practices like arbitrary termination, often based on inequitable regimes of customer ratings. It is important to understand and highlight unfair labour practices in the gig economy, and to assist workers, consumers and regulators as they hold platforms to account,” said Van Belle.

The 2021 report also highlights some of the changes within the gig economy during the sustained lockdowns of 2020 and 2021.

“While the food delivery sector has increased, the lockdowns, curfews and alcohol bans have had a significant impact on the e-hailing sector. Similarly, in-person service delivery platforms, such as domestic work and handyman services, have been challenged by travel restrictions, social distancing and other Covid-19 safety measures,” the report said.

Dr Kelle Howson, Oxford internet institute researcher, said decent work and job creation are not mutually exclusive.

“This is why, by bringing workers and other stakeholders to the table, Fairwork is developing an enforceable code of basic worker rights that are compatible with sustainable business models,” said Howson.

The report highlights some positive improvements during the Covid-19 pandemic.

“This year we are pleased to highlight platforms that have embraced their social responsibility and proactively addressed the economic impact of the pandemic among their workers. This includes educational opportunities, food vouchers and financial Covid-19 hardship funds,” said Dr Louise Bezuidenhout of UCT's department of information systems.

However, financial precarity has increased as a result of the pandemic. “As many people are staying off the roads, rideshare workers are especially affected as demand for their services drops,” the report said.

“In the interviews with e-hailing drivers, they estimated that their income had dropped by up to 75% during the lockdowns. Sustained impact due to curfews and alcohol bans caused earnings not to 'bounce back' as expected thereafter. A number of platforms have also had to cut staff, which put pressure on their communication channels, etc.”

According to the report, the very model of the gig economy means that workers have always been vulnerable.

“The gig economy, globally, has always existed at a time of economic expansion. We’ve never yet seen the gig economy at a moment of economic contraction. This is where we’ll see what this shifting of economic risk truly means.

“Platforms will probably be able to weather a lot of the crisis because they can so easily shed workers/obligations. They won’t have salaries to pay and they won’t have fixed capital standing idle.”

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