A report that rates working conditions of platform workers in SA says that high inflation, especially for transport, has made it difficult for these workers, who are classified as self-employed, to cover their costs.
It is estimated that at least 1% of the SA workforce takes part in the platform economy, but the number is growing by more than 10% annually. In SA’s high unemployment environment, digital labour platforms, such as ride-hailing and food delivery services, are becoming increasingly popular modes of employment.
The SA report was compiled and published by the Fairwork project, a global network of researchers that focus on labour practices in the platform economy across more than 30 countries, in collaboration with the University of Cape Town’s (UCT) School of Information Technology.
When factoring in additional costs, platforms such as Uber, Uber Eats and Bolt did not meet the minimum-wage criteria.
The 2022 report assesses 13 of SA’s largest digital labour platforms against five principles of fairness — fair pay, fair conditions, fair contracts, fair management and fair representation — giving each platform an overall fairness rating out of ten.
Some of the top performing platforms in 2022 were home cleaning service provider SweepSouth (a score of 7 out of 10), micro-jobbing platform M4JAM (6/10) and food delivery service Mr D (6/10).
Ride-hailing service provider Uber scored 2 out of 10, as did Uber’s food delivery service Uber Eats, and Bolt, also a ride-hailing service, scored only 1 out of 10.
SweepSouth and M4JAM were among six of the 13 platforms that were assessed that could provide evidence that workers’ pay is at or above the minimum wage of R23.19/hour.
When assessing minimum wage, the scores took into account not only the amount paid by the platform to the worker for hours worked, but also the cost of providing task-specific equipment and paying work-related and additional costs out of pocket (such as travel costs, petrol and mobile phone data). When factoring in additional costs, platforms such as Uber, Uber Eats and Bolt did not meet the minimum-wage criteria.
Amid the post-pandemic opening of the economy the ride-hailing sector has picked up strongly. However, the huge increase in the driver’s cost structure — especially the price of fuel — has eroded the margins of drivers since their earning rates have not kept pace, the report said.
Legal loophole
It explains that the platform economy benefits from a legal loophole that exists in SA, as in most countries, where labour rights are limited to workers classified as “employees”. By classifying their workers as “self-employed” or “independent contractors” digital platforms manage to avoid the costs and duties arising from employees’ rights such as minimum pay, maximum hours, and paid leave.
Workers on the platforms covered by the report were, without exception, classified in this way. Consequently, all the costs associated with doing their work must be covered by the workers themselves.
“Fairwork interviews conducted with platform workers this year reveal that for most workers, fuel is the biggest contributor to their costs … some workers estimated that their hourly costs exceeded their estimated hourly pay,” the report said.
During the launch of the report on Thursday Prof Jean-Paul van Belle, director of the Centre for Information Technology and National Development at UCT and co-principal Investigator for Fairwork in SA, said it was difficult to rate whether there has been a general improvement in working conditions for platform workers in SA.
This was because, over the last four years during which the report has been produced “disturbances in the economy” such as Covid-19 and the war in Ukraine kept arising that influenced overall outcomes by, for example, accelerating the development of food delivery services and then squeezing margins with the increase in fuel prices. But, he said, broadly, in terms of the “moral compass” they were seeing a “positive evolution in SA as platforms become enlightened in terms of social responsibility”.
However, report author, Pitso Tsibolane, said there were still instances of platforms not making any progress in improving conditions for workers.
“There is reason to be optimistic, but at the same time we must be cautious and remember that change will not happen [automatically]. We have to put pressure on policymakers and as consumers, to put pressure on the platforms, we have to change our behaviour and use our buying power to reflect the changes we want to see,” Tsibolane said.
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