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Couriers and Activists Call for Reforms in Indonesia's Gig Economy

Non-profit organizations and online communities have voiced their support for demands for better treatment of couriers.

With the pandemic causing a nearly 50% increase in e-commerce transactions this year compared to 2020, e-commerce and logistics companies are experiencing steady growth. However, the increased revenue for the company has not been channeled well to delivery couriers, who are the backbone of e-commerce operations.

In 2016, Ade Putra started working as a motorcycle taxi driver for various platforms such as Uber, Gojekand Grab. However, last year, when the company ride hailing saw a drastic drop in passenger orders due to lockdown affecting most parts of Indonesia, Ade decided to switch professions to become a courier. He joined two logistics companies—GoKilat and Lalamove owned by Gojek.

Ade thought that the two jobs would bring him a decent income, which they were until in June, both companies adjusted their incentive schemes, which reduced the commission per km of delivery riders for each order.

"Previously the Lalamove fare was IDR 4.000 [USD 0,28], but it was cut in half in January 2021. GoKilat also changed the incentive scheme recently, so we filed a complaint," Ade told KrASIA. He is also the spokesperson for the Lalamove partner group which strike in June and collectively deactivated their accounts for three days.

Ade and other couriers working for Hong Kong-based Lalamove also complained about the platform's suspension policy. “Sometimes things happen that are beyond our control, such as the wrong delivery address, or suddenly our motorcycle breaks down. However, the platform doesn't care about this reason, and we can be suspended if we cancel an order or if a customer gives a low rating," he explained.

In early June, GoKilat courier Gojek refused to accept the order in protest of the new compensation package. Documentation by Shutterstock.

Injustice in the partnership model between the platform and the courier

gig economy is a relatively new concept in Indonesia, popularized by companies ride hailing like Ubers, Graband Gojek, which revolutionized the informal ojek since 2014. Grab—which acquired Uber's Southeast Asia operations in 2018—and Gojek have expanded their services beyond ride hailing to provide other offers, including remote delivery and food delivery.

Following the success of ride-hailing companies, a number of logistics companies such as Lalamove, Lazada Logistics, J&T Express, and SiCepat have also started operating in Indonesia to provide fast logistics solutions and delivery, supporting the growth of e-commerce in the country. Some of these companies have adopted a "partnership model" with their couriers, claiming to offer greater freedom and flexibility in terms of hours and work arrangements. However, these companies do not classify couriers as formal employees. Instead, they are defined as temporary contractors. Without establishing a formal working relationship, the company can deny the courier the incentives that Indonesian law should receive.

“Platforms sharing economy currently offers a quasi-partnership system that leads to the exploitation of workers,” Bhima Yudhistira Adhinegara, director of the institute think-tank The Center of Economic and Law Studies (Celios), told KrASIA. "In an ideal partnership, both parties must agree on every policy, so the company should not take unilateral decisions, especially in terms of wages and workload."

“The company offers the 'illusion of choice', as if couriers have the flexibility to work at any time. But with a low incentive system, they have to work all the time if they want to bring home decent money,” said Margianta Surahman, executive director of Emancipate Indonesia, a youth organization focused on employment issues.

What's more, below Labour Laws at present, gig workers are not allowed to form a formal union, and their organization is only seen as an informal community, making it difficult to voice their demands.

Lazada Logistics in Indonesia is supported by more than 15.000 employees and courier partners. Documentation by Lazada Indonesia.

Demand reform

The average net income of GoKilat couriers in May 2021 was around IDR 1,6 million (USD 112), less than half the minimum wage in Jakarta of IDR 4,4 million (USD 309), according to report Gajah Mada University. The report also highlights that the average working hours of GoKilat couriers is 11,2 hours per day, 25,2 days per month. In addition, 60% of couriers do not have health insurance, and 97% do not have vehicle insurance. KrASIA could not find the latest public data or reports from other companies.

In the first half of 2021, at least four strikes were carried out by couriers as a form of their dissatisfaction with the low incentive scheme. Performance workers protest ShopeeExpress in April, followed by protests against GoKilat Gojek, also known as GoSend Same Day, in June. Wave organized action for better remuneration and benefits continued with another protest against GrabExpress and Lalamove in the same month.

Growing discontent from delivery workers prompted a number of independent researchers, nonprofits, and the online community to work together to shape official petition which will be submitted to the Indonesian Minister of Manpower, Ida Fauziah. The petition, which has a title that can be translated as “Please protect e-commerce couriers, as they are not safe and prosperous,” has garnered more than 8.549 signatures since September 2. Organizers hope to collect 10.000 signatures.

The petition writer hopes the ministry can enact new regulations to ensure a decent income scheme, humane workload, labor rights, and legal assistance when needed for couriers. They also urged e-commerce platforms to provide better public education about the system cash-on-delivery due to a series of violations against the courier by disgruntled customers.

Complaints about mistreatment of gig workers are a global phenomenon. At the end of July, China issued new policy to protect food delivery drivers and ordered online platforms to guarantee basic income and social welfare for their riders. In Singapore, Prime Minister Lee Hsien Loong expressed concern for delivery workers and said his government would address the struggles of low-wage workers in general.

With more than 33 million gig workers in Indonesia, critics say the government should immediately take similar action. Adhinegara of Celios made a comparison with the UK, where Uber drivers are classified as workers, not self-employed independent contractors. Analysts believe that Indonesia's technology sector, whose valuation continues to grow, has a responsibility to improve the welfare of its driver and courier partners.

“All the requirements to formalize the working relationship between the technology platform and the driver-partner have been met. There are employers, employees, clear job descriptions, and job targets. If we keep pushing gig system for unskilled workers, we will enlarge the informal sector where workers do not have job protection and security,” said Adhinegara.

When contacted by KrASIA, head of logistics Gojek, Steven Halim, said that GoKilat driver partners are an important part of the company's business. Drivers have the freedom to set their own working hours and the flexibility to decide how many packages they want to send in a day, he stressed. "At the same time, we recognize the importance of ensuring they have a sustainable income," he added.

“We have a competitive basic income scheme for GoKilat drivers, and an incentive scheme that provides greater opportunities for them to earn additional income.”

Steven did not provide details on the basic income and incentive scheme, but he told local media in June that courier partners get a bonus of Rp1.000 (USD 0,07) per package for one to nine deliveries, rising to a maximum of Rp. 2.500 (USD 0,18) per package for shipments of 15 packages and above.

Lazada also gave a similar response. “The safety, health and well-being of every Lazada Logistics partner, including our couriers, has always been and will always be our top priority. Every Lazada courier partner in Indonesia is entitled to life insurance and accident insurance," said Philippe Auberger, Chief Logistics Officer of Lazada Indonesia.

Meanwhile, the current average incentive rate for Shopee Express delivery partners in Greater Jakarta is IDR 2.213 [USD 0,16] per package based on 80 packages per day. “Our incentive program always complies with local regulations, and is very competitive in the logistics service industry. We support our courier partners through various other initiatives including offering training and insurance coverage to ensure a safer work environment,” a Shopee representative told KrASIA.

Reform promoters, however, say that the partnership model between online couriers and technology platforms is not even recognized by the Indonesian framework. "Indonesia's labor law does not recognize this kind of partnership, so regulators should immediately review [the law for this system]," Adhinegara said. While law number 20 of 2008 concerning micro, small and medium enterprises (MSMEs) regulates a partnership system involving MSMEs, gig workers must be regulated in the labor law, he added.

Meanwhile, Emancipate's Surahman said that if changing courier status from "partner" to employee "is too difficult right now", tech companies should update their current model to at least provide guaranteed minimum income and insurance.

Surahman, along with other activists and representatives of the online courier community, held an online meeting with Ministry of Manpower staff in August. After the meeting, the Minister of Manpower Ida Fauziah said: will evaluate the partnership system until finally making changes to support an equal bargaining position between couriers and technology companies.

“Once the petition reaches 10.000 signatures, we will follow up with the ministry to put more pressure on the public. Hopefully the government will provide win-win solution, said Surahman.

-This article was first released by KRASIA. Re-released in Indonesian as part of the collaboration with DailySocial

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