In the weekly column we take turns writing about innovation and economic trends in Asia.
(Photo: Klawe Rzeczy)
I still have an hour until the interview appointment, but the streets are hopelessly overcrowded. The meeting point in Jakarta CBD is only seven kilometers from my hotel. Nevertheless, the traffic forecast on Google Maps tells me that I will almost certainly be late if I get in a taxi now.
Fortunately, there is a way out of the traffic misery in the Indonesian capital. Tens of thousands of helpers are available around the clock to somehow get people like me to their destination on time. They wear helmets and jackets in the garish colors of the start-ups they work for and weave their way through the traffic jams of the megacity on their mopeds. After ordering via the app, it takes less than two minutes for one of the drivers to stand in front of my hotel lobby and maneuver me on the pillion between the stuck cars to my meeting.
The savior of my schedule is part of a huge fleet of two-wheelers that Asian tech companies like Grab and GoTo have assembled in their super apps. Within just a few years, it has become an indispensable part of urban infrastructure. But the working conditions in the industry are highly controversial. Several tragic incidents in the past few weeks have once again asked customers and investors who is actually paying for the business model.
The moped drivers of the popular apps not only transport passengers who have a hard time and deliver food: They are also essential for e-commerce offers that promise the delivery of products within a few hours. With their omnipresence, the app operators have risen to become the most valuable companies in the region: GoTo is currently worth almost 18 billion dollars on the Jakarta stock exchange, and Grab, which comes from Singapore, is worth more than 10 billion dollars.
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Four million moped drivers work for Indonesian taxi apps
In the meantime, there is hardly a larger city in Asia in which the two super apps or their local counterparts – such as Ola in India – are not represented. Their presence is particularly large in Indonesia: the demand for alternative mobility solutions is enormous due to the chronically congested roads and poorly developed local public transport. According to industry representatives, around four million moped drivers are used by taxi apps and e-commerce companies across the country.
Unrealistic targets led to average working hours of 10 to 15 hours a day.
(Photo: Reuters)
While Indonesia impressively shows the potential of the so-called gig economy, the country is unfortunately also showing the massive problems of this part of the internet economy. Local media recently reported several suicides among gig workers, which were linked to the high economic pressure that those affected were apparently under. Some of the deceased were found in the uniform of the tech companies they worked for – or still had the smartphone in their hands with which they had received their delivery orders until the end.
Indonesian labor market researchers documented 14 cases of suicide among app drivers in an article published at the end of September for the specialist publication “Asian Labor Review”. “By Indonesian standards, that number is very high,” they write, “and there are probably more cases in the industry that have never been reported.”
Around 100 fatal accidents
The researchers see the suicides as the most extreme consequences of a precarious employment model. The platform operators would regularly confront their drivers with unilateral changes to the remuneration models. Unrealistic targets lead to average working hours of 10 to 15 hours a day, for which monthly wages of only $200 are not uncommon.
Working long hours without a break is also dangerous: around 100 fatal accidents involving drivers of transport apps have been documented in the Indonesian media in recent years. At the same time, the labor researchers complain of a debt trap: The fintech subsidiaries of the taxi and delivery apps give their poorly paid drivers loans to make ends meet – problems with repayment further increase the financial misery.
A solution to the grievances requires modern occupational safety regulations, which platform operators cannot simply evade by declaring their drivers to be freelance partners. A greater awareness of the problem is also needed among investors who, among other things, bought shares in the Asian taxi apps listed in New York in the hope of high profits.
Asia Technonomics
In Germany, there is still much broader and more detailed reporting on economic and innovation trends from the USA than from Asia. Wrong, we think. In our weekly Asia Techonomics column, we therefore want to bring you closer to the most exciting innovation and economic trends from the most dynamic region in the world.
According to the International Monetary Fund (IMF), the entire Asian region lost 1.6 percent of its economic output last year – far less than the USA or Europe. This decline will be far more than compensated for in the current year with expected growth of 7.3 percent. Asia is thus consolidating its economic importance for the world.
As Europe slips into the third Covid wave, infection and death numbers have been far better in Asia since the pandemic broke out. Last but not least, the corona crisis has shown that it is worth taking a closer look at Asia in order to learn for your own country.
We see that our readers are interested in exactly these topics. That’s why we want Asia Techonomics to take a look every week from now on at new technology ideas from Japan or China, billion-euro corporations that are stirring up the stock market in South Korea or Indonesia, tech investments in the Indian market, tests from cuddly robots to laboratory meat restaurants. Nicole Bastian wishes you a lot of fun!
Anyone who buys clothing from Bangladesh at dumping prices knows that the exploitation of seamstresses is the price. Tech investors must also be aware that the gig economy cannot be sustainable if service providers are fobbed off with starvation wages.
The taxi app charged me less than two dollars for the half-hour drive to my appointment. For customers who do not want to accept exploitative working conditions, the industry does offer an advantage: a generous tip can at least provide a little relief without detours.
In the Asia Techonomics column, Nicole Bastian, Dana Heide, Martin Kölling, Mathias Peer and Stephan Scheuer take turns writing about innovation and economic trends in the most dynamic region in the world.
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