In a previous post Caribou Digital’s founder, Chris Locke, shared some ideas on how we see digital technologies addressing the immediate issues relating to Covid-19. Given our current focus on digital platforms, we’ve also been thinking about how digital tools could help lessen the impact of Covid-19 on the millions of workers in sub-Saharan Africa who rely on a growing number of e-commerce platforms, ride-hailing and logistics companies, and services marketplaces for their income. There are an estimated 4.8 million platform workers in eight key African countries alone.
Globally the pandemic has demonstrated the precarious nature of gig-work. This is of even more concern in developing countries, where government safety nets don’t exist, many companies are young and underfunded so are unable to support workers in a downturn, and workers live closer to the poverty line.
After consultations with digital platforms in sub-Saharan Africa and beyond, we offer below a couple of suggestions for how funders could play a role in alleviating the impact of the pandemic on platform workers. What we have heard consistently from both workers and platforms is the need to act now. Incomes are being lost every single day and people are already using savings to buy basic necessities. Low and lower-middle income households in Kenya and Nigeria can subsist for four to six weeks without income, so workers and their families are drawing closer to the risk of malnutrition, starvation, longer-term exclusion from the labor market, and other socio-economic issues that could far outlast the pandemic itself.
Support for platform workers
Payments for Stay-at-Home Training
Our recent work has explored how platforms are helping fill skills gaps by training the small-scale vendors and self-employed workers using their sites. For workers whose services are no longer in demand, no longer safe to perform, or who have to quarantine, time at home could be an opportunity for skills development. Workers could be paid for remote training upon completion of assessments, and training modules could be fully digital using smartphones if workers have them, or SMS where they do not. Payments could be by mobile money and could be roughly equal to on-platform monthly average income prior to Covid-19. Training modules would cover a range of ‘skills for the digital age’, offering benefits to workers’ on and off platform livelihoods (e.g. financial literacy training, digital skills, soft skills and vocational training, as well as information on how to deal with Covid-19).
These training modules already exist in various forms with platforms and third party training organisations such as African Management Institute, Edume, Arifu, and others who would be potential partners. Training sites could be zero-rated by MNOs to enable access, as some have already done with educational sites. Platforms could provide a channel to reach and assess which workers are in need and help to execute the program.
Connecting out-of-work platform workers to new opportunities
Platform workers who are healthy but whose services are no longer in demand could be connected to new job opportunities, such as:
New types of work that have arisen to tackle the pandemic
Across Africa artisans are sewing masks, making hand sanitisers, and building customised handwashing stations to protect vulnerable communities and key workers from contracting Covid-19. In addition to preventative measures, countries are increasing the capacity of the healthcare system, such as building new testing facilities and temporary hospitals, which requires labor to create and maintain. Redirecting workers’ skills to these efforts could be one way to maintain their incomes. Lynk, a service platform in Kenya, have developed a proposal to use their platform workers to provide professional cleaning and sanitization services for essential businesses and locations during the crisis.
As countries go into lock-down, reduced movement will impact vulnerable individuals in the community. New York City has offered to hire out-of-work Uber and Lyft drivers to deliver food to homebound senior citizens. A collaboration such as this in Africa could help alleviate reduced income for boda-boda or ride-hailing drivers, and in doing so help governments protect vulnerable members of their population. Rwanda has already set up a free door-to-door food delivery program; engaging out-of-work ride-hailing drivers in such work would help to maintain their incomes and protect the vulnerable.
Matching labour supply and demand across platforms
In China, Meituan — an e-commerce platform — signed on over 300,000 riders to service the spike in e-commerce orders resulting from the lockdown. New riders came from industries that had suffered during the pandemic such as restaurants, fitness centres and manufacturing. We anticipate similar opportunities across Africa as delivery companies, and other key platform services, fight to keep up with demand. For example logistics company GetBoda told us they have already seen a 150% increase in demand, and expect this to continue to rise. Shortlist, a recruiting platform, have begun an initiative to help connect Kenyan companies that are hiring, with those that are downsizing. We would be excited to see support towards similar initiatives in different African countries.
Job creation programs
Employment programs could provide safe, socially-distanced work and improve infrastructure or the environment. For example, a get-to-work program that plants billions of trees to help alleviate global and local climate-change issues (as suggested by McKinsey & Company), or constructing or repairing roads, schools or other public infrastructure.
Support for platforms
Operating capital support
Digital platform business models rely on high transaction volumes and a delicate balance between supply and demand. As demand plummets under Covid-19, so too do revenues, while fixed costs remain. This is putting a huge strain on African platforms’ finances, many of which have enough operating capital for just a couple of months. As such, the pandemic could threaten the viability of platform businesses as a whole, which in turn threatens the livelihoods of the tens of thousands of workers dependent on them for income. While platforms speak passionately about how worker welfare is ingrained into their company values, the reality is that, as young companies who are overcoming the many obstacles involved in running a business in emerging markets at the best of times, their ability to smooth worker incomes during the worst of times is limited. Emergency funding to help platforms survive the pandemic should also be a consideration.
“Time is of the essence. Every day that goes by we are burning cash.” — African Ride-Hailing Platform
Platform working group
As platforms respond in innovative ways to shifts in market demand due to Covid-19, there is value in platforms sharing their challenges and solutions. A working group could convene platforms across markets so that they can share best practices. Some such efforts are being made locally and in an ad hoc way, but greater coordination may help. Donors and development organisations could join these discussions to hear directly how they can play a role.
If you have suggestions for how funders could help platforms and platform workers manage the economic impact of Covid-19, please get in touch. We welcome more ideas and the opportunity to support executing any of these should funders be interested. Email firstname.lastname@example.org or email@example.com.