Digital Labour Platforms Must Provide Philippine Gig Workers a Fair Deal
The Philippines faces significant labour protection challenges amid a growing gig economy. It needs to outgrow consumer-focused regulations and address business risks being pushed down to at-risk workers.
In December 2022, the World Bank’s economic update for the Philippines sounded the alarm at the “growing informality in the labour market”: there was an uptick in casual, low-paid, and precarious work in the midst of the global Covid-19 pandemic. This, however, reflects the broader rise of the gig economy wherein digital platforms intermediate between consumers and independent contractors on a per-task basis, effectively circumventing employer-employee arrangements and the labour safeguards that are supposed to come with it.
In the Philippines, multinational ride-hailing and delivery platforms such as Grab, Foodpanda, Lalamove, and Borzo have penetrated the market and native start-ups such as Angkas, Joyride, TokTok, MyCab, Hirna, or Mangan.ph have also proliferated across the archipelago. The platforms’ independent contractor model takes the elements of informality but rebrands the worker as free, flexible, independent, and entrepreneurial.
Research by Fairwork Philippines shows that there are currently close to half a million Filipino platform workers in ride-hailing, food, and courier services. Rampant displacements in other sectors of the economy during the pandemic resulted in platform labour becoming a primary source of livelihood. When former president Rodrigo Duterte implemented one of the longest lockdowns in 2020, such platforms addressed the need for people to turn away from contact-intensive activities such as physical shopping and using public transport.
Technology entrepreneurs seized the opportunities and helped improve the government’s employment statistics. At the same time, contracting arrangements exacerbated workers’ vulnerability and dependency in a country where gaps in public delivery cause important services such as healthcare and social relief to be provided by employers. In 2020, the ride-hailing and taxi sector in the country collected US$625 million in revenue, while the volume of goods sold by food delivery businesses amounted to US$ 1.2 billion.
From our Fairwork Philippines research data, four-wheel ride-hailing drivers pay a “boundary fee” averaging P900 (US$15.72) per day. This is a rental fee for the vehicle, which remains unaffordable to median wage earners. With the surging popularity of platform labour, the marketing of cars and motorcycles directed at potential ride-hailing workers has intensified. Some promotions include “no cashout” or “zero down-payments,” only to result in costly monthly installments.
Because they are considered as independent contractors, platform workers shoulder, on behalf of the platform, the basic daily costs needed to perform work, including fuel, mobile phone credit for data and calls, and vehicle repair and maintenance – on top of vehicle loan servicing or rental costs. Some workers also reported buying their own accident insurance. The business risk is therefore being pushed down to already-marginalized workers.
The inherent dangers of “labour platformization”, compounded by government under-regulation, are apparent in the Philippines. Workers can become chained to financial commitments, and squeezed by seemingly predatory practices of downstream industries that are meant to support platform services but end up consigning workers to long hours of platform work.
Workers are also vulnerable to scams and can end up shouldering the costs and consequences. When riders encounter cash-upon-delivery “fake bookings”, for example, they advance the costs but platforms vary in terms of their reimbursement policies or responsiveness to appeals. Workers lose the opportunity to earn during tedious appeals processes. This is a big issue in the Philippines since account registrations for consumers have weak identity verification mechanisms yet platforms have differing levels of effort in preventing and mitigating the effects of such scams on workers.
Workers do end up with a net loss at times. This compels workers to stretch their hours and forego off days, and by working without rest might even be posing a hazard to consumers.
Yet government and market forces continually promote gig work as a viable entrepreneurial and employment opportunity amid the absence of labour regulations. Platform workers are portrayed as free and entrepreneurial, and more advanced and modernized than their counterparts – the unregulated motorcycle taxis or “habal habal” – because they work with technology apps. Companies vigorously promoted platform users as “superheroes” of the pandemic – an attempt to glorify on-demand work and Filipinos’ understanding of it as a viable and even altruistic work opportunity.
The inherent dangers of “labour platformization”, compounded by government under-regulation, are apparent in the Philippines. Workers can become chained to financial commitments, and squeezed by seemingly predatory practices of downstream industries.
In the absence of regulation, platforms engage in “dynamic pricing” with variable and fluctuant per kilometer rates, and it is the platforms’ prerogative whether to insure workers and how much of a social safety net to provide. There is also no standard for ensuring adequate and effective mechanisms for workers to raise concerns and seek redress. Workers may also suffer from the threat of deactivation when they make complaints or organize as collectives.
Our research has shown that workers crowdsource aid from other workers or actively share coping strategies in social media groups. While this represents worker solidarity, it speaks to the real and present gaps in regulatory frameworks. This starkly contrasts, for example, with consumer-focused policies that regulate the rates and price surges imposed by platforms.
Legislative proposals for improving working conditions of platform and freelance workers are pending in the Philippine Congress. These laws will take time to be passed, because the platform economy has expanded its influence and generated employment while operating in a still ambiguous and fluid manner, which allows for labour protections to be labelled as threats to growth and innovation.
Recently, there has been a surge of labour unrest among workers in the ride-hailing and delivery sectors of the platform economy, not only in the Philippines but in other Southeast Asian countries as well. Multiple stakeholders such as the media and civil society organizations can play important roles in making these protests more visible and supporting workers in exerting greater pressure on platforms to commit to fairer working conditions. Business models may have a new name, but the risks and warranted protections remain the same.
Cheryll Ruth R. Soriano is Professor in the Department of Communication of De La Salle University in Manila, Philippines. She is Principal Investigator for Fairwork Philippines.