Indonesia’s Rideshare Workers Struggle with Low Wages and Legal Limbo

4 min read
indonesia's rideshare workers struggle with low wages and legal limbo

Millions of Indonesians rely on rideshare apps such as Gojek and Grab for their daily transportation, delivery, and other services. However, the workers behind these apps face low wages, long hours, and uncertain legal protection, as the country’s labor laws have not kept pace with the rapid growth of the digital economy.

According to a recent report by the International Labor Organization (ILO), Indonesia has the largest number of online platform workers in Southeast Asia, with an estimated 4.5 million workers in 2023. 

The report also found that these workers earn less than the minimum wage, work more than 40 hours per week, and lack social security and health insurance.

The report attributed these challenges to the ambiguous employment status of the workers, who are classified as independent contractors rather than employees by the app companies. This means that they are not covered by the existing labor laws, which guarantee minimum wages, overtime pay, annual leave, and other benefits for formal workers.

The workers have also faced difficulties in organizing and bargaining collectively, as they are dispersed across different locations and have limited interaction with each other. 

Moreover, the app companies have the power to set the prices, commissions, incentives, and ratings of the workers, which can affect their income and job security.

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Some workers have tried to form associations or unions to voice their demands and grievances, but they have met with resistance from the app companies and the authorities. For instance, in 2023, the Indonesian Online Drivers Association staged a nationwide strike to protest the low fares and high commissions imposed by Gojek and Grab. However, the strike failed to achieve its goals, as the app companies did not respond to the workers’ demands, and the government did not intervene to mediate the dispute.

The ILO report urged the Indonesian government to update its labor laws and regulations to reflect the changing nature of work in the digital era, and to ensure that the online platform workers enjoy decent work conditions and social protection. 

The report also recommended that the app companies adopt fair and transparent policies and practices, and that the workers strengthen their collective representation and bargaining power.

The report also highlighted the potential of the online platform economy to create new opportunities and benefits for the workers, the consumers, and the society, if it is governed in a responsible and inclusive manner. The report said that the online platform economy can contribute to the economic recovery and development of Indonesia, especially amid the COVID-19 pandemic, which has disrupted many traditional sectors and livelihoods.

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