The gig economy is a growing sector in Africa with a promising future. The gig economy is a model of independent contractual work between employers and employees. This form of contract is not a new phenomenon as Africans have always received income for informal services they render, particularly outside a full-time day job.
The significant development is the digital turn this kind of work has taken, including in Africa, where more than 280 gig platforms employ around 4.8 million people. However, as opposed to “traditional employees”, African gig workers do not receive benefits from governments or platform companies.
Where benefits are offered, they are only applicable to a particular job and cannot be transferred from one position to another. These meagre benefits leave them with very little to show for their hard work in the long run.
The Covid-19 pandemic has exposed the precarious nature of the gig economy. For example, in Kenya, drivers working for ride-hailing platforms have seen their income fall by up to 90 percent in the face of restrictions on the number of passengers, lockdowns, and curfews. Some international platforms, such as Bolt, the Estonian ride-sharing company, did introduce Covid financial relief for those at their headquarters. The company has a base in Kenya, but their drivers in Kenya did not receive the relief package.
The unpreparedness of the platform-based economy in cushioning gig workers against an economic shock the magnitude of Covid-19 highlights the more significant problem of a lack of financial security that has marred the informal sector for way too long. There should be a change now.
Gig-based companies need to partner with insurance agencies to provide benefits to their workers. A study by the Centre for Financial Regulation and Inclusion(CENFRI) revealed that this is already the case with only 6 percent of Africa’s digital platforms. An example is the South African Rent My Ride, a platform where users can list their cars for rent. It offers $365 000 liability cover while the vehicle is rented out.
This initiative is a step in the right direction, but it does not provide the best reward for gig workers. Gig workers should have social safety nets of their own such as health insurance or retirement funds. Part of their income per gig can be accrued and reserved in funds they are entitled to even if they change jobs. In Ghana, People’s Pension Trust, a for-profit company, offers retirement savings accounts to informal workers. This micro pension system is arguably not as sustainable as a tax-driven pension, mainly benefiting the traditional workforce. This system calls for introspection and innovation in creating weightier nets regarding decentralised funding of retirement.
Gig companies can also invest in financial literacy to empower them to accumulate their financial security. Most of these platforms are more likely to attract a workforce with no formal education and subsequently not much insight into personal finance issues. Why should a worker dedicate years of life to the informal sector, earn some income, and reach the peak of their life with no asset to their name? Furthermore, why should any business organisation pursue corporate social responsibility take pride in a disempowered workforce?
It is next to impossible to implement much change in the African gig sector without state governments playing their role. There should be an inclusion of the gig workforce in the employment laws and policies. In 2017, Uber South Africa drivers launched a lawsuit against the ride-hailing company following an unfair dismissal case through the Commission for Conciliation Mediation and Arbitration (CCMA). The CCMA affirmed the status of Uber drivers as employees but was met with opposition from the Labour Court, which held the view that the drivers were not Uber SA employees as they had failed to prove there was an employment relationship. These grey areas in informal employment legislation contribute to the lack of regulation of the informal sector.
The gig economy is undoubtedly picking up in Africa, and it is here to stay. To exclude this group of workers from benefits their counterpart traditional employees receive and the security and peace of mind that comes with them paints a grotesque picture of labour on the continent.
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*Phemo Kgosi is a writing fellow at African Liberty Writing Fellowship
