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Why it’s not a bed of roses for workers in Kenya’s gig economy

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A Glovo delivery boda boda outside Java House on Kimathi Street. FILE PHOTO | NMG

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Summary

  • Platforms such as Uber, Glovo and Bolt, among others, have created opportunities for thousands of Kenyans who earn a fee for various services, including making deliveries and transporting people.
  • In April last year, drivers of ride-hailing firms Uber, Bolt and Little Cab threatened to stop working if the platforms failed to increase fares and commissions in the wake of increased fuel prices at the time.
  • Gig workers suffer from income volatility and the lack of a safety net in the event of illness or inability to work.

The launch of ride-sharing, fast-food outlets and online ordering and delivery platforms has transformed the short-term work arrangements also known as gig economy.

Platforms such as Uber, Glovo and Bolt, among others, have created opportunities for thousands of Kenyans who earn a fee for various services, including making deliveries and transporting people.

The gig workers enjoy several benefits, including choosing how much to work and greater flexibility than traditional forms of employment that feature clocking certain hours and reporting to a specific job location.

Challenges for the semi-independent contractors also abound as captured by Australian consultancy Fairwork’s Kenya 2021 Labour Standards in the Gig Economy report.

These range from income uncertainty, a lack of benefits like pension and maternity leave, unilateral disciplinary measures, including removal from the platforms.

The report also found many gig workers risk earning below the minimum wage. Only those contracted by delivery firm Glovo are likely to earn the equivalent of minimum wage levels after costs such as fuel, vehicle maintenance and mobile data.

“Only one of the platforms in our study (Glovo) provided sufficient evidence to show that their workers did not fall below statutory minimum wage levels for their active working hours, after costs were taken into account,” the report says.

“While many of the workers in our study reported earnings above minimum wages on platforms, we could not evidence that they were guaranteed minimum net earnings in line with statutory provisions.”

Under Section 46 of the Labour Institutions Act 2007, the minimum monthly salary of a driver in Nairobi, Mombasa and Kisumu is set at Sh18,319.5.

In other former municipalities and town councils such as Limuru, Mavoko and Ruiru, this is set at Sh16,907.9.

The minimum wage in Kenya depends on location and job type, ranging from Sh121.3 per hour for a labourer in a city, to Sh275.95 for an artisan.

Fairwork says while there is no obvious category that is relevant to most gig workers, it assessed the majority of platforms against the category of ‘car driver’ at Sh164.9 per hour.

The authors of the report noted that the platforms largely operate outside the existing labour laws, resulting in the payment of fees or commissions that fall below the minimum wages.

“Kenya’s current employment legislation was passed over a decade ago, before the emergence of gig work,” the report says.

“Platforms have therefore been able to circumvent statutory obligations by ensuring that their contracts with workers do not align within any of the categories in the Employment Act.”

Fairwork added that policy change is needed to, for instance, ensure that platforms allow workers to access and transfer benefits such as health insurance (National Hospital Insurance Fund) and pension from one platform to another.

In April last year, drivers of ride-hailing firms Uber, Bolt and Little Cab threatened to stop working if the platforms failed to increase fares and commissions in the wake of increased fuel prices at the time.

The operators said their earnings had reduced drastically and made it difficult for those with car loans to meet their daily needs and also keep up with repayments in an environment of static fares and commission.

Petrol prices, for instance, had in the previous month hit a nine-year high on rising crude costs in the global market, with a litre of the commodity in Nairobi retailing at a minimum of Sh107.66.

The price of the commodity in the capital city has since rallied to above Sh120, underlining the rising cost pressure for partner-drivers.

Gig workers also suffer from income volatility and the lack of a safety net in the event of illness or inability to work.

Under these conditions, workers are unlikely to experience the autonomy the platforms claim and instead become dependent on and controlled by the technology start-ups, Fairwork said.

“Incomes for platform workers are extremely unpredictable, as a consequence of circumstances they have no control over, including fluctuations in demand, an oversupply of new workers signing up to platforms, changes in key costs such as the price of fuel, and platforms’ ability to change their ‘commission’ at any time,” the report says.

“While workers may at times earn a minimum or living wage through platform work, they have no assurances that their living costs will be covered in a given month.”

The vulnerability of gig workers was particularly evident during the outbreak of the Covid-19 pandemic.

It was during this time when they were forced to work in some of the riskiest conditions without any social protections such as medical covers and retirement benefits.

Not working was not a viable option since the majority rely on the platforms as the main source of income for themselves and their dependents.

“Because platform workers are generally barred from accessing social protection due to their ‘self-employed’ classification, the perils of working during the pandemic have been amplified for them,” Fairwork said.

“The majority of platform workers worldwide have not been able to afford to self-isolate or take days off, in the absence of paid sick leave or sickness benefits.”

The finding is supported by an International Labour Organisation (ILO) study that showed that seven out of 10 platform workers could not receive compensation or paid leave if they tested positive — posing a risk to both themselves and others.

“When Covid-19 lockdowns hit, the extreme degree of this income insecurity was felt by many platform workers, who either lost their incomes entirely if they were unable to work due to restrictions, or had no choice but to continue to work and risk exposure to the virus,” the report notes.

The ILO added that the pandemic slashed the incomes of nine out of 10 ride-hailing drivers and seven out of 10 delivery workers in the countries surveyed, including Kenya.

Other challenges that the workers face include account suspension and deactivations by operators without giving them an opportunity to reply to the claims, the survey shows.

“One big issue is the threat of account suspension or deactivation, for instance, if workers fall below a certain rating, if they receive a customer complaint, or as a result of technical errors in navigating platforms’ interfaces,” said Fairwork.

“In these cases, workers lose their ability to earn income through the app without warning, and as our research found in many cases, without the ability to appeal or rectify the situation.”

Customers and drivers or riders sometimes clash over fares charged, routes taken, abusive language, drunkenness and other issues perpetrated by one or both parties.

In such cases, gig workers are often reported to the platforms and/or given poor service ratings.

The report added that platforms must demonstrate an avenue for workers to meaningfully appeal disciplinary actions.

Because workers are not protected by legal provisions guarding against unfair dismissal without notice, the report notes that the threat of instant deactivation contributes to precarity and insecurity in gig work.

It also undermines workers’ ability to organise and protest platform conditions for fear of being deactivated as a result. Gig workers have expressed their willingness collectively organise to advocate their rights though.

Fairwork found that 99 percent of them currently do not belong to any union.

George Kashindi, a partner at Munyao Muthama & Kashindi Advocates, earlier said gig workers have been let down by regulatory gaps in the employment laws that only specify rules for the traditional working relationships.

The Kenyan Employment Act does not cater for employees in newer platforms brought about by technology or the pandemic times, which have necessitated from working from home or virtually.

“The law did not foresee a structure where we have this kind of workers and their relationship being different from normal. The current employment laws only benefit the modules where you go to work and get a salary,” said Mr Kashindi earlier.

Globally, there are several ongoing legal battles to better regulate the platforms and improve the welfare of the gig workers, with the companies lobbying and suing to protect their business models.

The state of California, for instance, recently lost the fight to have companies like Uber and Lyft classify their workers as employees. The workers, however, got minimum earnings, accident insurance, and a healthcare stipend out of the process.

The Fairwork report was published using information collected through desk research, interviews with workers, and platform-provided evidence last year.

The consultancy collaborated with, among others, the University of Oxford and Oxford Internet Institute to prepare the report, which was funded by Germany’s Ministry for Economic Co-operation and Development and German development agency GIZ.

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