Platform Economy and Platform Workers
Jahangir Alam Shovon
The development of information technology around the world has created the foundation of the platform economy. Services like online marketplaces, food delivery services, ride sharing are examples of platform economy development. There is no doubt that the platform economy will change the SME business pattern. There has been talk of e-commerce delivery, food delivery services, ride share, especially on platforms where workers, delivery persons, riders, share drivers are getting professional recognition, respect and appropriate remuneration?
By looking at the lifestyles of platform freelancing workers who work in Daraj, Chaldal, Foodpanda, Pathao and Uber who are not paid, it can be realized that the conditions under which they work are suitable for other human resource policies and time. A report on this issue has also been published recently. The third Fairwork Bangladesh report identifies reasonable improvements in platforms’ responsiveness towards workers’ needs and demands since our previous report of 2022. The last year’s evaluation encompassed 11 platforms, resulting in an overall enhancement in Fairwork scores compared to 2023. In 2022, the highest score attained was three out of ten, achieved by three platforms (Chaldal, HelloTask, and Sheba).
However, this year, the highest score has risen to five out of ten, with Sheba being one of the top performers. Sheba stood out as the most conscientious platform in ensuring fair pay, contracts, management, and representation for workers. Additionally, Daraz also secured a high score of five out of ten by prioritizing fair pay, working conditions, contracts, and management practices. Ride-Sharing platforms are increasingly reducing their commission rates, shifting from the standard 30% to 25%, and even lower to 15% for specific vehicle categories such as motorcycles (and as low as 7% for trucks or pickups). Alternatively, some platforms are transitioning to a subscription-based model with a fixed rate. This shift appears to be a response to worker resistance, evidenced by strikes or workers circumventing platforms to directly connect with customers (known as “khap” in Bangla). Regarding payment structures, Chaldal and Daraz offer a monthly base pay supplemented by a variable income component tied to performance. Conversely, other platforms compensate workers per completed job.
This variability incentivizes workers to extend their working hours in pursuit of earnings closer to a livable wage, as many platform workers in Bangladesh currently earn significantly below the threshold. Survey organization also found that those earning a living wage work extra hours – up to double the standard working hours of around 208 hours a month. They identified at least 20 challenges and risks in theie interviews with workers. The most prominent risk was that workers had to bear liabilities of unintentional product damage (such as broken or dented packages) during delivery, or non-payment of delivered product or service (customers refusing to pay workers), and the security and safety of the vehicle. According to the report, Chaldal and Daraz stand out from other platforms in providing health support for workers.
Notably, the workers said they received medical support, sick leave, and sometimes sick pay and financial support in case of sickness and accident. Besides these platforms, Foodpanda, Pathao, and Uber have insurance policies for their workers. However, Sheba and HelloTask have been working towards introducing insurance for their workers, Truck Lagbe is the only Bangladeshi platform to have explicitly exempted itself from any liability arising from any damages or losses caused to the workers, including losses caused by accidents or injuries. Every Daraz worker they interviewed confirmed signing a contractual agreement with the platform.
As for workers on other platforms, some remembered signing a physical contract, while others recalled accepting the platform’s terms and conditions either through an app or during a phone conversation. In past years, their research revealed that platform workers primarily communicated with the platform via call centers. Medium-sized organizations take this call center as a service from a third party that is not their own or is not permanent. In many cases, there are many new platforms for hiring such freelancers who hire third parties to reduce costs. Even if desired, staff of this level can be appointed through recruiting agencies in Bangladesh. In this case, workers do not have many rights. In this year 2023 Three issues emerge, phenomena—platform, intermediation, and personal Service bypassing the platform (Khapmara), The non proffessinal and nno recognize rideshare (Khapmara) issue is on the rise. As a result of this, on the one hand, the safety risk of passengers and bikers is increasing and on the other hand, the practice of unprofessional behavior is increasing.
Investors’ investments in platform businesses are suffering and the government is also losing revenue. Because the government gets tax when services are exchanged through the platform app. This is done when the passenger is called from the road in the name of the alleged consignment and there is no tax or commission. Needless to say, the buyer does not benefit from this. In this, the rider gains temporarily, but the sector as a whole suffers. The question is why this is so. There are at least three main reasons for this (1) general tendency to disobey laws or regulations (2) trying to win because of low commissions (3) indifference to government policies and their implementation. The government’s ride-sharing policy is seen as a poor example of policy and implementation. On the one hand, the government has bound the platform with various rules. Being a Corporate company they cannot go beyond this. On the other hand, when a passenger is picked up (Khapmara) outside the app, the government or the police take the matter forward. Despite the loss of revenue to the government, silence on this matter is not desirable. The survey found that more than 30% of workers bypass the platform and do so. In reality this number may be higher.
A good point is have some association of platform workers. According to the association, they can’t live a normal life on the money they get driving for carshare. If a driver averages get Tk 3,000 per day, commission Tk 750, fuel cost Tk 750, mobile and lunch Tk 250. Expenses are excluded only Tk Tk 1250. Tk 31,250 if run 25 days a month. Out of this, the maintenance cost of the car is Tk 8500 per month including garage rent. Other annual expenses on the back of the car include maintenance, insurance and battery, which amount is tk 5,000 per month. Driver has – 17,750 Tk. The Dhaka Ride-Sharing Drivers Union feels that this amount is not conducive to a normal life for a driver or a family head. However, the workers of ride-hailing platforms are relatively more organized, with some informal regional unions: the App-based Transport Union (previously the ‘Dhaka Ride-sharing Drivers’ Union’), the Shommilito Riders Drivers of Chattogram, and the Sylhet Riders’ Club.
Firework Bangladesh Scores 2023 Platform Score (out of 10) Daraz 5 Sheba 5 HelloTask 4 Chaldal 1 Pathao 1 Uber 1 Delivery Tiger – Foodpanda – Obhai – Paperfly – Truck Lagbe – Entrepreneurs are uncomfortable with the current labor laws of the country. The size of the workplace or office will depend on the number of workers as per the provisions of the Labor Act. In the case of platforms, since the workplace of the workers is not a factory or an office. So that ratio will not measure the store or fulfillment center of the e-commerce organization. But sometimes the government inspectors visit and create pressure on this issue. which is anachronistic. This requires changes in labor laws and inclusion of various policies, policies and laws regarding platform workers. Foodpanda Rider is a public Facebook group with 38,000 members.
There are some Facebook groups of platform workers like this. There they exchange and compare their facilities and income. Even if they are related to each other, the benefits are not much. Their service quality is not increasing. Platforms do not take their views into account when making policy. Closing the app does not solve the service (Khapmara) issue. There is no progress even on changing their commission. Last year’s study has found inconsistent platform policies and an absence of regulatory mechanisms. To improve the working conditions of platform workers in Bangladesh, we therefore propose a minimum viable policy agenda:
1. Recognize platform work in the labor law regardless of the employment type.
2. Ensure mandatory insurance coverage of work for injury, hospitalization, and death to ensure platform workers’ safety and protection.
3. Provide access to capital and loans, given that some platform work requires the purchase of equipment and gadgets.
4. Capacity building for managing occupational health and safety of the workers.
It is also a matter of discussion whether the time has come to fix a uniform policy on minimum wages. A uniform policy especially for all self-employed workers starting from house maids (chuta bua) to other workers. Because in most cases the government formulates the policy and does not work equally well in its implementation. As a result limited or corporate companies cannot go beyond it. But others continue to flout the rules.
The authority then has no responsibility. So there is a risk of any policy being contrary to Pauline’s. But some way can be found for proportional development of both the workers and the platform. Is it Time for a Regulatory Framework for fairwork and Platform workers? In the current situation, the commission has to increase the fare to provide more benefits to the bikers. But will our customers be able to adjust to the increased rent? The overall situation indicates an unbalanced economic situation. It seems that if the country’s economic order and normal dynamics are not ensured, it is not possible to overcome it with just commissions or policies. So first of all it is more necessary to put the industry on a solid foundation.
Writer: Executive Director, e-Commerce Association of Bangladesh
