COVID 19 has exacerbated vulnerabilities for gig workers; Who is responsible for providing social protection?
Authored by Jerioth Mwaura, Project Lead — Youth Impact Labs,
As Covid-19 continues to spread around the world, for developing countries such as Kenya, the pandemic is disrupting the economy in an unprecedented manner. In order to address the health challenge, the Kenyan Government has provided directives to reduce the spread of the virus. This includes international travel ban, curfew, inter-county movement restrictions, and a directive for workers to work from home where possible. The directives issued by the Kenyan government to curb the spread of the virus, though necessary, have greatly affected the majority of workers who live on paycheck to paycheck. Thousands of Kenyans have been rendered jobless with the President warning that the number of jobless Kenyans may rise to over half a million in the next six months. The pandemic has undoubtedly exposed the vulnerability and lack of social safety nets for gig workers in the country. Although government bodies, NGOs, and corporate companies across the country are going above and beyond to ensure implementation of policies and measures that will cushion the economic effects brought about by Covid-19, little to no attention is being paid to informal sector workers.
The Youth Impact Labs team sought to study the effect of social safety net — or lack thereof in the gig sector. The International Labor Organization ILO defines social protection as the security people and families have in the face of vulnerabilities and contingencies.
Effect of the pandemic on gig work is dependent on the level of direct interaction with clients required
Covid-19 has resulted in a mixed bag of outcomes for gig workers. Some gig workers- especially those that require direct interaction with clients have seen a sharp decline in demand while other gigs such as courier services have seen a surge in demand. A significant drop in the demand for services such as plumbing, electrical repairs, hair and beauty services, and office cleaning services has been witnessed within the past three months of Covid-19 being declared in Kenya. Additionally, car-hailing services like Uber and Bolt have been greatly affected as the nationwide curfew and the cessation of movement within the Nairobi Metropolitan area has resulted in fewer ride requests. This has caused a decrease in the number of rides that car-hailing services are now receiving per day and consequently, reduced earnings. At the beginning of May, Uber revealed that 3,700 full-time employees or around 14 percent of the company’s global workforce would be laid off owing to the widespread decrease of orders brought about by the pandemic. A recent article by the Press Telegram places the combined job cuts made by Uber since the emergence of Covid-19 at about 25% of its global workforce.
Nature of gig work resulting in vulnerability
Gig work is by nature temporary, task-based, and independent. While these qualities are attractive for workers who enjoy the flexibility that is attached to such a job, the downside of independence is that the employing platforms do not have an obligation to provide social security benefits as they would to their employees. Given that gig workers are not permanent employees of the platforms or companies that dispatch them, they do not qualify for additional work benefits such as medical insurance, paid off days, sick time, retirement benefits, and other employee benefits provided in permanent and formal jobs.
Gig workers are adapting negative coping strategies
In a recent baseline survey by Mercy Corps’ Youth Impact Labs (YIL) program targeting 140 gig workers 79.7% of the respondents solely depend on temporary jobs to earn an income. With the current pandemic, only 24% of these respondents have been able to take up additional jobs with the majority of gig workers admitting to no longer having a source of income to sustain them during this period thus employing negative coping mechanisms.
Mercy Corps’ research team also established that 80% of the respondents who took part in this survey have either delayed or skipped paying rent since the pandemic was confirmed. In addition, 88% of the respondents now have outstanding debts with a majority of them running out of sources in which they can obtain money to cater to their everyday needs. 82.1% of households mentioned cutting back on non-food items such as water and hygiene products Although the survey also revealed that most households have now resorted to taking one meal a day, for households with children this coping strategy is not achievable. In addition, households have resorted to taking expensive debt selling of productive and non-productive household items, delaying and skipping on paying rent, borrowing food and utilities — as far as the crisis goes, informal sector workers continue to run out of sustainable coping strategies.
The effort by platforms to support gig workers during the pandemic
Platforms are not mandated by law to provide social protection measures for gig workers. That said, some platforms have stepped up and hit beyond their weight to protect their workers. Gig platforms have pivoted to providing disinfection services to ensure that their workers are still able to earn an income despite a decrease in demand for more traditional blue-collar gig jobs such as repair works. Various online platforms have put in place intervention measures to support their workers. Lynk, for instance, has offered support to its gig workers by providing them with Personal Protective Equipment in form of disinfectants, gloves, and masks as well as offering training on the ways workers can protect themselves while at home or at work. In addition, Lynk has collaborated with Safe Hands Kenya to offer disinfecting services for informal settlements across Nairobi. Through this partnership with Dandora Transformation League (DTL), more cleaners working under Lynk have benefited by being trained and onboarded to deliver cleaning services. FixChap, a Tanzanian gig platform, has diversified into fumigation services. The firm anticipates that this diversification will turn the opportunities received to long or short term contracts for their gig workers even post Covid-19. Taskmoby an Ethiopian gig platform has also started providing fumigation services to households, businesses, industrial parks, factories, and government offices such as the embassies. Other platforms have mobilized funders and well-wishers to support gig workers.
During the month of April, the Uber Care Driver Fund saw 55,000 Uber drivers across India receive cash grants to help cater for immediate and essential family needs during this season. The fund was opened up to contributions from Uber employees, riders, corporations, and NGOs where INR 6.33 was collectively contributed by 23,000 Uber riders, and employees, corporations and NGOs. Whereas more Online platforms such as SWVL, Uber Kenya, Glovo, Jumia and SafeBoda among others have adopted measures to support both gig workers and clients during this pandemic
Gig workers in Kenya lack basic social protection
Most informal workers, precisely those in the Gig economy, are not guaranteed social security protection since in some respects, they are viewed as independent workers. While this argument may have worked in the past, the ongoing awareness created on this issue presents new challenges to policymakers for workers’ rights.
Social security
While social security may be defined differently between countries, what is common is its role in safeguarding workers against the effects of job loss or retirement. In Kenya, formal full-time workers have a mandatory contribution to the National Social Security Fund (NSSF) which can be primarily accessed once a worker reaches the retirement age of 55. Though the fund is equally available to Informal workers, in most cases they do not have a set contribution structure with their employer and even for those who do, the challenge is that it cannot act as a safety net when the worker loses their source of income.
Health insurance
Gig workers do not have suitably structured healthcare insurance plans with their employers in spite of the high health risk involved in their day to day work. For motorbike riders who handle deliveries, accidents are bound to take place and cause permanent disability. In the wake of Covid-19, these riders are at the risk of contracting the disease due to their constant contact with products and people.
As the case is today, most gig workers who succumb to health conditions have to dig deeper into their pockets to cater for medical services — not only for themselves but even for family members. During our study, Youth Impact Labs spoke to a gig worker who sold her personal assets to help partially pay medical bills. She also explained to us that her child constantly falls ill and during the pandemic, she has been forced to borrow money in order to cater for the bills involved — this is the story of many gig workers.
While countries like Kenya might have a health coverage system like National Hospital Insurance Fund (NHIF) which provides a “self-employed” option, the nature of gig work does not necessarily provide consistent income to help the worker fit into this scheme. Health Insurance, like most insurance options, has traditionally targeted the formal sector with very few insurance companies providing adequate and accessible products to gig workers. Online gig workers are, in particular, more complicated to insure due to the on-demand and unpredictable nature of their work, poor and irregular pay, unstructured contracts (or a lack of any contract at all), and inconsistent cash flows. As a result, most products provided by these insurance companies do not meet the unique needs of the gig worker segment. Pilot programs implemented by Microsave have proven that, if well designed, insurance companies can design tailored insured programs that are effective for the gig economy. According to this research by Microsave, in order to generate insurance solutions for gig workers, behavioral research and human-centered design can be applied to develop product concepts that are adequate and accessible, and that meet the needs of gig workers.
Sick pay
The Covid-19 pandemic has brought to light the necessity of sick pay policies for gig workers who are currently at the forefront of providing essential services. They face the risk of infection but most of them cannot afford to take sick offs since it means they will go without an income for the number of days they are unwell. Some gig work platforms are stepping up to provide a form of sick pay for gig workers in light of the pandemic. For example, Uber Eats in the UK has a policy of providing deliverers £30 per day plus an additional payment of up to £100 per week based on average earnings in the prior six months, for up to 15 days of illness.
Examples of efforts to improve worker safety net that the Kenyan gig economy can adopt
Charter of Principles of Good Platform Work undersigned by Uber, Deliveroo, Postmates, Grab, Cabify an MBO partners
In the effort of providing solutions, leading companies in the digital gig economy have come together to actively identify and commit to key principles that in their view should underpin good platform work through the ground-breaking initiative dubbed “The Charter of Principles for Good Platform Work.” One of the principles highlighted in this initiative is Social Protection.
The principles highlighted in the charter include the following:
- Governments and platforms should collaborate to ensure that workers have access to a comprehensive set of reliable and affordable social protections and benefits that meet their individual needs, taking into account local conditions, and are well informed about their options. This process should take into account workers’ views and feedback on their needs.
- Regulation should be adapted as appropriate to enable platforms to support the provision of such benefits to workers who are not classified as employees.
- Contributions to public or private social protections and benefits could be made by stakeholders as appropriate, subject to employment status, jurisdictional context and local conditions.
- Social protection and benefits should be portable and pro-rated, where applicable and subject to local conditions and jurisdictional context.
Coronavirus Aid, Relief and Economic Security (CARES) Act
Recently, the US Government passed into law, the Coronavirus Aid, Relief and Economic Security (CARES) Act which will facilitate provision of unemployment benefits for American workers (self-employed, independent contractors, nonprofit employees and gig economy workers) who have lost their jobs as a direct result of COVID-19. While this current economic support is focused on the pandemic, this could be an opportunity for transformational change for gig workers where unemployment benefits are concerned. Currently, gig workers are not under any unemployment benefit scheme meaning that in the event they lose their jobs, they can no longer sustain themselves or their dependents, economically.
Fair work principles by Fairwork foundation
A platform policy report by Fairworks Foundation covering 120 platforms across 23 countries highlighted positive measures taken by platforms to cushion workers during the COVID-19 crises. Around half of the platforms surveyed provided some form of sick pay to cushion gig workers who were ill, however, the payments often fell below minimum wage. 15 platforms including Ola in India set up a fund to provide financial support to workers. In addition, some platforms provided a clear policy that they would help with payments on health insurance or health savings schemes.
Efforts made platforms in developing countries should serve as a wake-up call for gig platforms in Kenya to step up their efforts to provide social protection to workers on their platforms.
Guidelines for fair conditions developed by Fairworks include:
- Accessible sick pay from platforms that applies universally to all those unable to work while ill or quarantined or while providing essential care for sick family members, and which relates to pre-pandemic average earnings
- Sick pay policies that specify precisely and openly how much workers will be paid, with simple application processes which do not impose onerous health documentation requirements that sick workers cannot meet
- Extended sick pay for those workers hospitalised by Covid-19 infection
- Provision of general medical insurance cover
- Provision of life insurance cover or other death-in-service benefits
Who should provide worker safety nets?
While the jury is still out on who should be responsible for providing safety nets for gig workers, it is apparent that an ecosystem-wide approach is needed to design a solution that guarantees protection for workers. Government bodies, Non-Governmental Organizations and companies across the country now have an opportunity to put in place social protection systems such as cash transfers, paid leave, sick pay and subsidized health coverage.
Gig workers take care of us. But the question remains, who can they count on to take care of them?
About Mercy Corps Youth Impact Labs
Catalyzed by funding from Google.org, Mercy Corps’ Youth Impact Labs (YIL) identifies and tests creative, technology-enabled solutions to tackle global youth unemployment, accelerating job creation, so every young person has the opportunity for dignified, purposeful work. In Kenya, YIL focuses on digital marketplaces and platforms that offer services to micro and small businesses; agricultural supply chain management; and digital work.
The program supports these enterprises through financial and technical support, issued in the form of milestone-based grants. Through our post-investment support, on-boarded partners also get access to advisory services to support the development of technology solutions and tailored business support service to actualize scale.
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