Grim reality of gig economy workers

Dar es Salaam. A new report has identified holes in the gig economy, which is increasingly employing tens of thousands of workers in Tanzania.

The gig economy, also referred to as the platform economy, includes the use of independent contractors, online platform workers, contract firm workers, on-call workers, delivery workers, ride-hailing  and other temporary workers who enter into formal agreements with on-demand companies to provide services to the company’s clients.

In Tanzania, more than 10,000 people are estimated to have been employed in the ride-hailing industry alone as drivers of cabs, motorcycles and tricycles, while 3,000 others are in delivery services, according to a report by Repoa, which was released yesterday.

The report indicates that nearly three-quarters (77 percent) of the gig workers are the sole breadwinners for their families.

According to the study, these workers face risks while at work, including accidents and injuries, crime, and violence. “They do not receive any coverage in case of injury or accident in the course of work,” reads part of the report.

“Moreover, no platform worker reported receiving paid parental and sick leave or health insurance from the platform. That means, in case of any shock, the platform worker’s families are less likely to be resilient,” it added.

The report also found that only 27 percent of the platform workers have independent health insurance, making them more vulnerable to shocks such as Covid-19 and the Russia-Ukraine war, which both increased the prices of fuel and other commodities.

Some of the proposed solutions include registering and requiring the provision of insurance; defining the rights and obligations of a platform worker; including the workers in social security schemes; and raising awareness among the workers.

Speaking at the launch of the report conducted by Repoa in partnership with Oxford University, senior researcher Ms Hilda Mwakatumbula said that the African platform economy is predicted to encompass over 80 million workers by 2030, including in Tanzania.

“The government needs to accelerate efforts to formally register platform workers and require the provision of health insurance; platforms should mandatorily contribute a certain percentage based on an amount proportional to the duration of work or platform workers’ earnings from the platform,” she insisted.

The findings unveiled specifically on health insurance show that only slightly above a quarter of platform workers have independent health insurance not offered by the platform, which makes platform workers vulnerable to shocks, including Covid-19.

Again, the government should clearly define a platform worker’s relevant rights and obligations, adding that it would set out the parameters within which a platform may engage with platform workers and provide clarity around mandatory social protection and benefits.

She added that stakeholders in the platform economy should join hands to raise awareness of the importance of social security among platform workers.

Launching the report, the Land Transport Regulatory Authority (Latra) director general, Mr Habib Suluo, said the research has come at the right time as the regulator plans to meet with stakeholders on this platform.

“We have received complaints from the public about some of the drivers’ temper with the system and raising fares different from the actual trip, while others force customers to cancel the trip so that the payment can be seen by authorities,” he said.

Mr Suluo said the gig economy is growing very rapidly, and those who engage in that business should be very smart because people have already trusted them. “We will arrange a meeting with them to listen to their challenges and find solutions together.”

On the other hand, the chairperson for the Online Drivers Association of Tanzania (Toda), Ms Neema Mushi, said it is true that there has been a challenge by some of their members to cancel the trip so that they can be paid manually.

She said that those drivers are forced to do so because the charges by platform owners are too high and do not enable the driver to make a profit. “We have already sent our complaint to Latra and they are aware of this,” she said.

“There are many challenges in this business, such as no employment contracts, health insurance if the driver has an accident, and taking care of himself, and this research will help open the doors of dialogue so that youth can get their rights,” she added.