Category: Digital Labour

Digital Labour

Numbers, Type and Income of Online Gig Workers in Indonesia

yudhogs

Authored by:
Yudho Giri Sucahyo, Arfive Gandhi, A. Labib Fardany Faisal
Faculty of Computer Science, Universitas Indonesia, Depok, Indonesia
 

The online gig economy has been a trending topic in recent years. It offers flexibility for gig workers to search various kinds and scale of work via an online platform. It offers a different approach compared to conventional and routine 9 to 5 jobs. It enables people to organise their passion and time by selecting projects that fit their interests.

The Online Labour Index (OLI) as established by Oxford University announced a 26 percent increase in gig work from July 2016 to July 2017 [1]. Most workers came from the United States, United Kingdom, India, Australia, and Canada [2]. Surprisingly, India was included in the top five although it is a developing country with a high rate of unemployment.

This fact inspired a question of whether Indonesia also contributes to the online gig economy. If yes, how many online gig workers come from Indonesia and what benefits do they gain. Although Indonesia faces a digital divide, 65% (c.170m) citizens have access to the Internet [3]. Given the country has a 5% unemployment rate [4], the online gig economy offers a promising opportunity for the country to reduce its unemployment rate and increase individual income.

To answer the above questions, quantitative research was undertaken through data aggregation from various online gig platforms. Nine platforms were selected: Upwork.com, Freelancer.com, Fiverr.com, Peopleperhour.com, Guru.com, Sribulancer.com, Projects.co.id, Fastwork.id, and Microworkers.com. Web crawling and scraping were used as data collection techniques based on necessary information criteria.

Table 1 shows the results of our mini-research. We collected data from 171,033 Indonesian users of the above platforms at the end of October 2018. By considering that a gig worker is active when his/her latest project was no more than 28 days from the date of web crawling and scraping, out of 171,033 gig workers, only 2,062 were active, which is only 1.2%. The top three platforms used by gig workers in Indonesia are Fiverr, Upwork, and Projects.co.id. Fiverr had the most active Indonesian workers, and by far the highest percentage of Indonesian workers who were active.

Further information was also collected during web crawling and scraping to get more detail on the profile of Indonesian online gig workers: both field of work and income. As shown in Figure 1, most Indonesian online gig workers (c.50%) specialise in creative and multimedia, then followed by clerical and data entry (c.21%), writing and translation (c.14%), and software development and technology (c.12%). This suggests there may be a significant opportunity for Indonesia to strengthen its creative and multimedia industry and increase further its participation in the global online gig economy.

                                    Table 1. Statistics of Indonesian Online Gig Workers

Platform Indonesian

Users

 Active Indonesian Gig Worker Percentage (%)
Fiverr.com 837 557 66.55
Upwork.com 13,945 449 3.22
Projects.co.id 115,558 428 0.37
Freelancer.com 16,639 187 1.12
Sribulancer.com 9,841 181 1.84
Microworkers.com 1,017 176 17.31
Peopleperhour.com 464 40 8.62
Fastwork.id 1,456 38 2.61
Guru.com 11,276 6 0.05

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Figure 1. Distribution of Indonesian Online Gig Workers based on Field of Work

Breaking down field of work by platform (Figure 2), we see some differentiation, with some platforms hosting a mix of different work types but others showing signs of domination: creative and multimedia work on Fiverr; clerical and data entry work on Microworkers, which focuses on simple jobs in large volume.

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 Figure 2. Distribution of Indonesian Online Gig Workers on Each Platform

Income of Indonesian online gig workers is shown in Figure 3. Nearly 50% of workers earn IDR 1 million (c.US$70) or less per month and nearly 80% earn less than the minimum wage. However, many of these are likely to be part-time. Around one fifth of online gig workers earn more than IDR 5 million: above the minimum wage in any region in Indonesia. With the average income of Indonesian online gig workers being IDR 3.4 million (c.US$240), this suggests that there is some promise and opportunity for the online gig economy in Indonesia to reduce the unemployment rate by taking advantage of flexible jobs via online platforms.

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Figure 3. Distribution of Indonesian Online Gig Worker Income

 

References

[1] V. Lehdonvirta, The online gig economy grew 26% over the past year, available on http://ilabour.oii.ox.ac.uk/the-online-gig-economy-grew-26-over-the-past-year/

[2] O. Kassi, V. Lehdonvirta, “Online Labour Index: Measuring the Online Gig Economy for Policy and Research”, Technological Forecasting & Social Change, pp. 1-8, 2018.

[3] APJII, “Indonesia Internet Users Behaviour Profile, a Survey Report”, 2018.

[4] Trading Economics, Unemployment Rate | Asia, available on https://tradingeconomics.com/indonesia/unemployment-rate

Digital Economy, Digital Labour

Digital labour platforms as winner-takes-all markets: implications for fair work standards

Niels Beerepoot

A number of contributions in the DIODE blog series have focused on how digital labour platforms such as Upwork and Freelancer provide new economic opportunities for online freelancers, particularly in the Global South. Subsequently, relevant questions have been raised on the precarious nature of digital gig work (see e.g. blogs by Balaji Parthasarathy, August 2018; Richard Heeks, July 2018; Mark Graham, December 2017), and how the regulatory framework for platforms can be strengthened to guarantee ‘fair work’ principles for those active on digital platforms. Initiatives towards third-party monitoring and certification in this field, and how decent work standards can be met, are interesting and should receive broad-based support. However, through the very nature of their functioning, digital labour platforms will always be plagued by a level of unfairness, which will be discussed in this blog-post.

One central but largely unexplored topic in the literature on digital labour is what it takes to be successful on digital labour platforms. As its central features, the competition for work is global, employment relations are flexible, and individuals rely on reviews and performance scores for securing new jobs. In practice, financial gains on digital labour platforms are highly uneven with a small number of freelancers securing the majority of the jobs. In management circles this would be regarded as the 80/20 rule (pareto principle), which in this case refers to the situation that 80 percent of the work is likely done by only 20 percent of the freelancers that are registered on the platform. In a similar vein, digital labour platforms are a typical example of a winner-takes-all market. The concept winner-takes-all markets was originally developed by Frank and Cook (1995, 2013) to highlight the emergence of top-earners in particular professions such as sports, music or other creative professions. In the digital economy the winner-takes-all principle can be identified at two levels: the digital platform industry at large, where platforms such as Facebook, Uber, Amazon.com and Upwork currently dominate their market niches, and for those working via platforms. Formal entry barriers to digital labour platforms are low, which means that anyone literate with a computer and access to the Internet can sign up. However, successful participation in digital labour platforms is a complex game because of the diversity of actors involved.

Whereas in local or national labour markets most buyers and sellers of labour share common grounds in terms of cultural background, education, and their understanding of what represent good work skills, work ethics and decent pay, this is not true on global digital labour platforms. Here, clients posting a job are likely to be presented with freelancers that are based, raised and educated somewhere half a world away in a profoundly different socio-cultural and educational context than the client’s. This creates an assessment challenge for clients, and adds a measure of uncertainty to hiring transactions. An additional measure of uncertainty is created by the digital nature of the working relation between clients and contractors. With clients and contractors at a distance and chances of them ever meeting in person being slim, the embedded relations and social monitoring and sanctioning mechanisms that encourage people to perform well and live up to their promises in offline working environments carry less weight, making it easier for either freelancers or clients to disengage or otherwise fail their counterparts. Under such conditions, contractors with good credentials (or a good digital reputation) are more likely to make it to the shortlists of clients looking for someone to hire. They are also more likely to be rehired and be able to secure higher wages for their ‘proven’ trustworthiness.

Skills-tests via digital labour platforms are the most obvious way for new entrants to show their capacity and to reduce uncertainty of clients. Surprisingly, Upwork (the largest global platform for digital work) announced in July 2019 that it will remove the various skills tests on offer via the platform, as clients didn’t find skills tests important when making hiring decisions. Rather, according to Upwork, clients consider profile introductions, portfolios, and job feedback a better showcase of a freelancer’s skills and experience. This shows the very nature through which digital labour platforms evolve for freelancers into winner-takes-all markets as it favours the more established freelancers with good credentials (for example a high performance rating and positive feedback). When client-generated feedback constitutes an important part of contractor credentials and is used by clients to (largely) base their hiring decisions upon, it favours contractors who have already received good feedback and it puts newcomers that have not yet had their chance to accumulate good feedback and build a digital reputation at a disadvantage. Such effects are likely to be more pronounced if clients in their assessment of potential contractors, have a strong interest in qualities that can be demonstrated only ‘on the job’ and not easily upfront. This increases clients’ reliance on the feedback received by contractors from other clients, and thus reinforces the importance of the feedback loop. This makes the platforms prone to exclusionary effects (in addition to distribution effects) as newcomers will have a hard time establishing a foothold in the market.

To conclude, the greatest contradiction of digital labour platforms is that success is very visible (e.g. through information on profile pages of freelancers) and newcomers are often lured to join (see blog by Niels Beerepoot, September 2017) but securing a position in this market is a major challenge. New entrants need to overcome barriers of uncertainty and lack of a digital reputation. These particularities in the functioning of digital labour platforms are hard to integrate when defining fair work standards but to a large extent determine how freelancers perceive digital gig work. Fair work standards are now oriented towards those who have acquired a seat at the table where joining the table is the hardest task.

Frank, R. & P. Cook (1995). The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us. New York: Martin Kessler Books
Frank, R. & P. Cook (2013) Winner-Take-All Markets. Studies in Microeconomics Vol. 1 (2): 131-154. Continue reading “Digital labour platforms as winner-takes-all markets: implications for fair work standards” →

Digital Enterprise, Digital Labour

Microenterprise in the platform era—identifying new ‘platform practices’

Jonathan Donner
Daniel, a shopkeeper and online freelance writer

The platform era is undoubtedly transforming the way goods, labor, services, and attention are exchanged around the world. But to what extent will platformitized markets change the livelihoods of millions of self-employed workers and small and informal enterprises in the developing world? 

Recently, the Partnership for Finance in a Digital Africa (FiDA) —an initiative of the Mastercard Foundation coordinated by Caribou Digital—conducted a study about how platformization is impacting micro- and small enterprises (MSEs) and the self-employed, offering its findings as a set of interlocking essays and video profiles. The study drew on qualitative interviews with micro-entrepreneurs in Kenya about how they use social media, e-commerce marketplaces, and online freelancing websites. Instead of a narrow focus on adoption, we identified emerging “platform practices”—four distinct ways in which MSEs are changing their workflows to adapt to the platform age:

We also found two overarching themes requiring further discussion:

A brief video of Dorcas, one of five entrepreneurs featured on the report site

This post for DIODE focuses on the implications of our research for the digital development community. It is a shorter form of our research implications essay, and is best conveyed as four imperatives:

Broaden the research focus from mobiles and ICTs to platforms

One line of research nearly 20 years strong looks at microenterprises’ use of ICTs. Yet the bulk of this work, whether focused on mobile phones specifically or on ICTs in general, isn’t calibrated to today’s changing internet landscape. Two forms of platformization are becoming more relevant, and need extensive study:

  • Individual micro-entrepreneurs use social media platforms for informal and real-time coordination with suppliers and customers. We aren’t talking about specialized “WhatsApp for business”, or Facebook for business, or even paid digital advertisements here. Wyche, Forte & Schoenebeck illustrate how these consumer-facing omnibus communication platforms have become the lingua franca of commerce in digital Kenya, our new research further underscores the remarkable ways in which micro-entrepreneurs have appropriated these platforms for their own purposes. MSEs have adapted these social media platforms into toll-free numbers, customer relationship managers, billboards and direct mail, pre-sales advertising, and after-sales support, all rolled into one.
  • The same markets are also being platformitized by the entrance of transaction platforms: websites designed to host multi-sided markets between buyers and sellers. These sites have scrambled the traditional means of finding, transacting with, and supporting customers. However, although they increase MSEs’ exposure, they also increase competition. Our work only scratches the surface of how this new visibility and competition impacts the profitability of small enterprises, and illustrates how more research is needed to assess whether transaction platforms work for small-scale producers, especially in developing countries.

Ask “how”, not just “whether”

The FiDA platform lens—by dividing platform functions into aggregation and discovery, transaction support, credibility, and ancillary data—enables us to see both whether and how platforms are altering prospects for small enterprises. We think this approach has merit for future studies, and we suggest that researchers zero in on specific models of change to ask how the platforms they study, be they Facebook and WhatsApp, or specialized transaction platforms like OLX, are transforming the markets they enter. It’s also important that we get to granularity. Specific affordances matched with specific functions on specific platforms matched by specific platform practices (i.e., user behaviors) is where the rubber meets the road.

Specify and replicate

A close read of our findings should quickly underscore the need for (1) replication beyond Nairobi, (2) specificity of various market segments and types of microenterprise, and (3) complementarity of methods. Our largely qualitative interviews could be expanded via quantitative study of how and whether platform use changes the profitability and sustainability of these businesses. Our study also suffers from survivorship bias: we have only spoken to active microenterprises; we have yet to investigate whether and how platformization is driving some micro-entrepreneurs from their markets.

Avoid detaching studies of digitized, platformized markets from the physical world

Our two blurring essays, on tech and touch and digital side hustles, illustrate the material component of digital pursuits. The realities of doing business in resource-constrained contexts may require more face-to-face time, more trust-building, and more creative ways of bridging the last mile in goods and services than those of less constrained markets. These dynamics are best unpacked with the type of ethnographic or qualitative work we were able to do in this study. At the same time, the very concept of “side hustles” challenges what we mean by a “job” or “a livelihood.” Digital side hustles, such as online essay writing or virtual assistant work, blur the lines between taking charge of one’s own fate and being captive to someone else’s algorithm. The Fair Work Foundation is developing a body of evidence around digitized platform work in the Global South. Our study highlights those individuals who keep one foot in a job or material micro-business and another moonlighting in the digital space.

Next Steps

We’re grateful for the opportunity to share this work with DIODE. Another helpful exchange has been with our co-travelers in the Mastercard Foundation community of practice, specifically BFA’s FiBR project, which has been looking at platforms used by micro-entrepreneurs in Tanzania, and Mercy Corps’s research into agricultural platforms in Africa. As a set, these studies shed light on changing practices and market conditions in East Africa and beyond.

We are particularly excited about the prospects for platforms to build on what they’ve already started, becoming digital spaces in which participants acquire a variety of skills and digital literacies required to thrive in the platform era. We call this “transformational upskilling” and will spend much of 2019 looking at this topic in a more comprehensive way.

Have questions, feedback, or ideas for further research on MSEs and platform practices? Please contact us at ideas@financedigitalafrica.org or @FiDAPartnership on Twitter.

Digital Labour

The Continuing Relevance of the State in the Age of Digital Gig Work

Balaji Parthasarathy

Technological change has always had an impact on the sphere of work. Every new form of work that has emerged has been accompanied by optimism about its potential, and concerns about its damaging effects. The same is true of digital gig work – a form of work that can be performed and delivered digitally via online platforms. A primary concern has been the exploitative nature of digital gig work, especially the micro-distribution models in which individuals, as “contractors”, register with the platform to complete their tasks (Meyers et al, 2017). Although being able to work from anywhere, at one’s convenience, on a digital platform may offer certain flexibility, the absence of physically proximate fellow-workers also leads to the atomization of the workforce (Kuek et al, 2015). With the supply of labour exceeding demand, there are questions about the tendency of workers to undercut one another in their eagerness to obtain work, and whether that will lead to a race to the bottom in terms of wages, reduce the bargaining power of digital gig workers and perpetuate socio-spatial disparities (Graham et al, 2017).

Historically, including in the 20th century, states have taken an active developmental role to ensure improvements in labour conditions and in aggregate standards of living. Is it possible for the state to address similar concerns that arise in the context of digital gig work, when technology gives platforms a global reach? This is an urgent question as a 2016 study by the Oxford Internet Institute reveals that a significant share of the gig workforce is in the less affluent regions of the world, primarily undertaking menial and repetitive tasks, while two-thirds of job vacancies are posted by employers from the developed world, including the United States, the United Kingdom, Australia and Canada (Lehdonvirta, 2017).

Such demarcation between the source and destination of work, and the attendant concerns about the digital gig economy, are reminiscent of arguments about the New International Division of Labour (NIDL). NIDL theorists, such as Frobel et al (1980), were concerned with “bloody-Taylorization” following the growth in the offshoring of low-skill, low value-added manufacturing from the 1960s. Yet, for at least four Newly Industrializing Countries (NICs) in East Asia – Singapore, South Korea, Taiwan, and Hong Kong – becoming a part of the NIDL offered a path to technological ‘catch-up’ and ‘late-industrialization’. Those NICs showed how, despite starting off with less-than-desirable work, it is possible to develop indigenous capability to move toward more high-skilled, higher value-added activity. In all these NICs, the dominant institutional force behind the socio-economic transformation was the state.

Amsden and Chu (2003), for instance, point to how Taiwan entered the world semiconductor market by offering low-skill assembly work. Over time, state investments in the education system and technological acquisition, its provision of financial incentives including tariffs and subsidies, and the building of physical infrastructure, created an industry which gave Taiwan a “second-mover advantage” and made the country the world’s leading semiconductor supplier. Specifically, firms pioneered the pure-play foundry, an organizational model in which they became adept at original design and manufacture without necessarily marketing their own brands. Thus, contrary to the fears of the NIDL theorists, the East Asian NICs showed that developing countries have the agency to move beyond exploitative niches in the international division of labour with technological upgrading. More broadly, this highlights that, while concerns about the impact of type and conditions of work on socio-spatial disparities are far from misplaced, there are also institutional means of overcoming these concerns.

The concentration of digital gig work in less affluent countries is largely due to a lack of better local job opportunities. Concerns about the precarious nature of digital gig work are equally true for locally available work in the vast informal sector, with gig work at least offering better monetary returns. But this is not an argument for the status quo. Rather, it is a call to draw from lessons about how institutional means, especially the state, can be deployed to ensure that menial and repetitive digital gig work becomes a stepping stone to more rewarding work and not the only choice arising out of a lack of other options.

One possible initiative by the state is to build, or assist private players in building platforms for local needs which can find global use. With such platforms within its jurisdiction, the state can regulate them to ensure adherence to socially acceptable norms of pay and work conditions. Local language platforms could be encouraged to ensure that digital gig work opportunities are available to a larger section of the population. To undertake such initiatives, the state must minimally promote what the East Asian NICs did so effectively to overcome the debilitating aspects of 20th century manufacturing – investment in education (to ensure employability) and physical infrastructure, financial incentives, and opportunities for ‘learning by doing’. Since current technology and global conditions differ from what they were 50 years ago, the specifics of state interventions will vary. But history suggests the state can play a useful role in harnessing the potential of digital gig work for social transformation. These trajectories and trends are explored at length by the author in a paper being written for the DIODE working paper series.

References
Amsden, A. and Chu, W-w. 2003. Beyond Late Industrialization: Taiwan’s Upgrading Policies. Cambridge, MA: MIT Press

Frobel, F, J. Heinrichs, and O. Kreye. 1980. The New International Division of Labor: Structural Unemployment in Industrialised Countries and Industrialisation in Developing Countries. Cambridge, UK: Cambridge University Press.

Graham, M., V. Lehdonvirta, A. Wood, H. Barnard, I. Hjorth, and D. P. Simon. 2017. The Risks and Rewards of Online Gig Work At The Global Margins. https://www.oii.ox.ac.uk/publications/ gigwork.pdf (accessed 24th June 2018).

Kuek, Siou Chew et. al. 2015. The Global Opportunity in Online Outsourcing. Washington D.C.: World Bank Group.

Lehdonvirta, V. 2017.Where are online workers located? The international division of digital gig work. http://ilabour.oii.ox.ac.uk/where-are-online-workers-located-the-international-division-of-digital-gig-work/ (accessed 24th June 2018)

Meyers, L., B. Minic, L. Raftree and T. Hurst. 2017. The Nexus of Microwork and Impact Sourcing: Implications for Youth Employment. http://gcyerti.com/wp-content/uploads/2017/02/The-Nexus-of-Microwork-and-Impact-Sourcing_Final_ONLINE_02.28.17_v2.pdf (accessed 25 May 2018)

Digital Labour

Development Implications of Digital Platform Labour

Richard Heeks

A new paper – “Understanding the Development Implications of Online Outsourcing: A Study of Digital Labour Platforms in Pakistan” – analyses the experiences of some of the millions of gig workers who undertake digital labour in developing countries via platforms such as Upwork and Freelancer.

Using the sustainable livelihoods framework as the basis for analysis, it identifies four things from interviews with workers and other stakeholders in remote areas of Northern Pakistan:

a) Employment Push: The context of politico-economic vulnerability that pushes unemployed individuals into digital work including lack of alternative employment, political instability and concerns about Islamic extremism.

b) Barriers to Gig Work: The typical barriers to digital gig work for those in more remote areas of developing countries. These include poor quality of technical infrastructure such as power and broadband connectivity; a lack of relevant knowledge and skills or the means to obtain them; limitations of current financial payment systems; and cultural norms that do not see online freelancing as constituting a “job”.

c) Worker Trajectories: The four trajectories of digital gig workers who go through training schemes: sinkers (the majority who never undertake digital platform work), strugglers (who try but appear largely unable to make a living), survivors (who can earn small amounts from digital gig work), and swimmers (who flourish and are able to build a career path via digital platforms).

d) Role of Institutions: The “re-institutionalisation” of digital labour. Notwithstanding narratives of the de-institutionalisation of digital gig work, experience in Pakistan shows three institutional forces impinging on online outsourcing to marginalised groups. There are the digital platforms themselves; often seen as improving the context for outsourcing work.  There are interventions of formal organisations – development, government and NGO agencies – who help overcome asset deficits that would otherwise exclude these groups from online outsourcing.  And there are informal linkages between freelancers themselves which provide assistance and work sub-contracts.