Workers Lose as Laws Can't Keep Pace with Rideshare Apps

By: Nabiyla Risfa Izzati, Universitas Gadjah Mada in Yogyakarta

Gig platforms have mushroomed in Indonesia in the past decade. But regulations have lagged and it's the workers who pay.

In just eight years, the gig economy has grown from nothing to being the primary source of income for up to 2.3 million Indonesians.

Known as the Go-jek effect, so called because of the pioneering ride-sharing app, the industry has seen dozens of companies pop up across the country since 2015 offering mostly rideshare and food delivery, along with other services.

But regulations governing the app-based sector have struggled to keep up. Workers have few or no rights. They have no sick leave or holidays. And they’re working longer hours for less pay. 

Gig platforms have mushroomed in Indonesia in the past decade. From super apps like Gojek and Grab to more specific apps like Shopee Food, Maxim, or InDrive to local platforms like Jogja Kita. Ride-hailing and food delivery dominate. 

There are anywhere from 430,000 to 2.3 million people (0.3 to 1.7 percent of the workforce) whose primary job is in the gig economy in Indonesia, the latest research shows.

This is similar to the US, Europe, and the UK, which range between 0.5 to 5 percent of the workforce.

The difference is, in these countries, the gig economy has been regulated much more seriously, especially concerning the labor rights of gig workers. In the UK, for example, platforms can no longer categorize their workers as independent contractors. Gig workers in the UK are entitled to core employment protection like the national minimum wage to paid leave.

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