Irma Gusmayanti
22 August 2024
Indonesia has a huge population and one of Asia’s highest motorcycle ownership rates. The Indonesian Central Bureau of Statistics reported that the number of motorcycles in Indonesia exceeded 125 million units in 2022, which is nearly half of the country’s million population.
Amid fierce labour market competition, the potential of the gig economy, and many people being laid off during the COVID-19 pandemic, many Indonesian citizens became online motorcycle taxi drivers (so-called “ojek riders”) and/or food deliverers from on-demand platforms.
Nevertheless, under Indonesian labour regulation, ojek riders and/or food deliverers from demand platform workers are categorized as independent contractors or partners. They do not have an employment relationship with the company; rather, they are tied by a partnership arrangement. Consequently, these workers are not afforded the same legal rights and protections as the company’s permanent employees.
Currently, no specific Indonesian regulation governs partnership arrangements for on-demand platform workers. Since the legal vacuum, employers would prefer to engage workers on a partnership basis, as it would relieve them of the obligation to pay regional minimum wage, health insurance, and other labour rights, especially for female workers. This situation results in employment insecurity that jeopardizes the welfare of workers who frequently lack alternative livelihood options due to the labour market’s vulnerability. The company is not responsible for any work-related accidents that occur to the ojek riders and/or food deliverers from demand platform workers. Moreover, partnership arrangements for on-demand platform workers, popularized by the gig economy, have significant potential to view workers as commodities and create exploitation.
According to 2023 survey results by the Institute for Demographic and Poverty Studies (Indonesia), Ojek riders work 9-16 hours per day to meet their living expenses. Each platform offers promotions to win the hearts of customers. Consequently, the workers shall work hard to accommodate consumers’ demands and competition among riders – but the conditions do not inevitably enhance workers’ bonuses. Those hours exceed the permissible working hours as stipulated in section 77 of the Indonesian Manpower Act 23/2003, which is limited to 7-8 hours per day.
The abovementioned problem potentially turns Indonesia into a precarious labour market, where more people are pushed into non-standard employment relationships. In a miserable state, workers shall accept poor working conditions rather than not working at all.
Should Indonesia learn from the UK and Australia?
Since 2021, the UK has achieved a significant legal victory and a step forward in winning gig worker status, as seen from the judgment of Uber BV and others v Aslam and others [2021] UKSC 5. The UK Supreme Court has ruled that Uber drivers are classified as employees according to employment laws, which means they are entitled to minimum wage, paid leave, and rest breaks. The Court ruled that the employee status can protect vulnerable workers from underpayment, excessive hours, and unfair treatment.
Australia also endeavours through the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth), which aims to close ‘loopholes’ that undermine wages and working conditions in Commonwealth jurisdictions, including addressing changes to “employee-like” work in the gig economy. Not only workers and unions but also Uber Australia, on its internet page, firmly supports the Act. The Australian Government’s commitment to ensuring a safe future for Australian gig workers – as reflected in the Act, deserves a thumbs up.
The actions taken by the UK and Australia constitute a noteworthy advancement within the labour economy. The landmark decision rendered by the UK Supreme Court and the Closing Loopholes No.2 Act in Australia pertains to protecting workers from the contracting model that online platforms operating in the gig economy employ to mitigate their expenses and uncertainties. Indonesia should contemplate this to establish solid legislation for the legal status and rights of workers on on-demand platforms.
Purely Dicta 