15 December 2021

Digitization of Exploitation - Study on the platform workers in the gig economy in the PH

A thematic case study presented by the Ecumenical Institute for Labor Education and Research together with the Computer Professionals' Union and World Association for Christian Communication


With the advent of smart machines alongside the continuous developments in the use of the Internet, further technological advancements in manufacturing and agriculture have been achieved. Advanced production processes have become the talk of the giant technology firms and have gained ground in both the developed and developing countries, albeit unequal in terms. According to economists and industrialists, global production has entered a fourth industrial revolution. As the world constantly welcomes innovations in robotics, artificial intelligence and machine learning, 3D printing, nanotechnology, and other advanced technologies, the possibility of a perfectly efficient production is seemingly inevitable and within reach.

The use of digital platforms has allowed for faster and wider transactions between businesses and consumers, with online-based corporations such as Amazon raking in billions of dollars in profits amid a devastating pandemic. Relations between Labor and Capital, however, grow increasingly antagonistic against a backdrop of economic and social crises that see only a handful surviving and oeven benefitting from.

Though the advancement of capitalism and rapid development of new technologies have driven innovations in the means of production, we have also seen that the technology in the hands of the elite and in the name of profit do not benefit the working class. That is not to say that the technology is inherently bad, for it is not. Rather, the elite and the capitalist societies have taken advantage of science and technology to advance their interests. The precarity of work still exists in many countries and the wages of the workers have not increased significantly when compared to the increase in the wealth of the richest capitalist in the world.

In the Philippines, as the Covid-19 pandemic continues to ravage the country’s economy, thousands of micro, small, and medium enterprises (MSMEs) have shut down. According to Ibon Foundation, 64% of the MSMEs in the country employing 3.8 million workers were immediately affected by the March 2020 lockdown. A separate study of the Asian Development Bank noted that 60% of the MSMEs have “zero income” due to temporary closures. Millions of workers have found themselves jobless, bouncing off one odd job after another. Long-term and regular employment with higher wages that were increasingly becoming obsolete due to contract-based, low-paying schemes have become even harder to find.

As establishments remain closed for walk-in customers and public transportation remains limited during hard lockdowns, the demand for online-based transactions and transport network vehicle services (TNVS) has skyrocketed. Taking a closer look at food and beverages, GrabFood Philippines country head EJ Dela Vega said in an online session on April 2020 that the demand for online delivery on their platform has tripled during the first two weeks of the enhanced community quarantine (ECQ) in Metro Manila. The lock down forced some restaurants to temporarily shut their operations, with some going online and offering delivery options. App-based services such as Grab and Foodpanda have become an enormous part of the “new normal” owing to the ease at which customers can readily have essential services instantly brought to their doorstep.

A report by tech venture Momentum Works showed that food delivery in Southeast Asia 183% from 2019 to 2020 and reached US$11.9 billion in gross merchandise value (GMV) in 2020. A separate research study by Statista meanwhile projects that the online food delivery segment’s revenue in the Philippines alone will reach US$359 million in 2022.

Ride-hailing corporate giant Grab contributed nearly half of Southeast Asia’s food delivery GMV in the same year, reaching US$5.9 billion. Grab also had leading positions in 5 out of 6 markets in the region. In the Philippines, it contributed 56% of the total 2020 GMV. With the fast-paced growth in the global market and in the gig economy, the increasing demands for digital transanctions and online delivery, it is not surprising that many workers who were forced out of their employment due to the pandemic have joined the expanding fleet of TNVS riders. Furthermore, workers are promised incentives, flexible working hours, and larger take-home pays that are not necessarily ensured in traditional operator-owned fleets. On the other hand, virtually no employer-employee relationships exist in these kinds of schemes since workers are deemed independent contractors. Workers in the gig economy lack the benefits that are guaranteed under regular employment. Minimum wages, health benefits, overtime pay and night differential, security of tenure, and the rights to organize and collectively bargain are oftentimes neglected.

With the rapid digitization of the workplace and the integration of labor into the gig economy, developing nations that have not established their own independent and national industries remain face even greater challenges. Who stands to gain from these technological advancements, particularly from the digitization of the workplace in the hands of few corporations? How are labor concerns being addressed in an individualized and neoliberal economic setting?

This study investigates the effects of the digitization and the conditions of Transport Network Vehicle Service (TNVS) workers within the gig economy particularly in online-based companies such as Lazada, Shopee, Grab, and Foodpanda

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