Victoria Fanggidae, Muto P. Sagala & Dwi Rahayu Ningrum, Perkumpulan Prakarsa
This report was featured as a chapter in “TRANSFORMATIONS IN TECHNOLOGY, TRANSFORMATIONS IN WORK”- a joint report co-authored by the global partners of JustJobs Network.
The emergence of the “on-demand” or “platform” economy illustrates the power of technology to make it easier, faster and cheaper for consumers to access services, while also creating income-generating opportunities on a large scale in a short period of time.
But critics warn against its reliance on self-employed workers who take on many of the risks of entrepreneurship without the benefit of a guaranteed wage and employment benefits. Moreover, the effects of the on-demand economy vary across the developed and the emerging economies.
Studying the on-demand economy in Indonesia, this study explains that high levels of informality and poor employment outcomes in the formal economy mean that unlike in the Global North, the on-demand economy represents an opportunity for better work and benefits. However, there is a need for new forms of regulation and worker representation that keep up with the fast pace at which this sector is expanding. The new kinds of companies and work arrangements that have evolved necessitate an evolution in policy frameworks to ensure basic standards of work quality.
Policymakers must be proactive about harnessing its benefits and minimizing its costs. Only then can the innovative potential of the on-demand economy be realized, including their capacity to strengthen social protection for a range of flexible, part-time, and self-employed workers.