Authors: Nur Huda, Adriansyah Dhani Darmawan, Maria Catherine (Centre for Innovation Policy and Governance, CIPG), and Richard Heeks (University of Manchester)
The recent viral video of a gig worker who passed away due to exhaustion has shed light on the harsh realities of the gig economy in Indonesia. The deceased, a 42 year-old male courier, was found next to his motorcycle in front of a house in West Jakarta and had presumably been delivering a package on 15 February 2023. The leading cause of death was suspected to be exhaustion, exacerbating existing health conditions, as no trace of abuse or violence was found. This tragic incident has highlighted the poor working conditions and inadequate safeguards for gig workers in Indonesia. Although they are referred to as platform “partners”, gig workers are not entitled to the same legal protections and benefits as traditional workers. This means they often lack access to basic employment rights, such as minimum wage, social security, and health insurance. Many Indonesian gig workers must work long hours to make ends meet with no steady income, vacation schedule, or health insurance.
Many issues related to gig workers in Indonesia are rooted in the workers’ legal status as “partners,” or “mitra,” which prevents them from having the same rights as formal workers. Nowadays, an increasing number of companies are opting for the partnership agreement model instead of a standard work agreement, such as being in a temporary employment contract, outsourcing, or even freelance. From a regulatory perspective, to call or classify gig workers as “partners” is a misclassification. Indonesia’s labour law (Law Number 13 of 2003 on Manpower) does not recognize the term ‘partnership’ at all. The term mitra or kemitraan (partner/partnership relation) came from the Law Number 20 of 2008 regarding sub-contracting to Micro, Small, and Medium Enterprises – a very different context from the partnership model that is now commonly found in practice between platforms and workers. It is also worth noting that according to the 2003 Manpower Law, a work relationship can be considered a work agreement when the legal document that binds two parties has at least four elements: work, command, time, and pay/wages. As each worker receives their work, pay, command and time (to complete the work) from the platform’s application, the relationship, in practice, fulfills the four elements and thus should be considered an employment/work relationship.
Faced with the rapid development of the gig economy, there haven’t been any notable regulations that directly address the core issue of gig workers’ status and rights. The regulations which have been introduced by the Ministry of Transportation mainly apply to the transportation sectors of the gig economy. One of the critical regulations is the Minister of Transportation Decree No.12 of 2019 (PM 12/2019) that first regulated the use of motorcycles as a mode of public transportation. The decree also acts as the primary reference for the development of motorcycle taxis tariff regulation (KP.667/2022), which sets the per-kilometer price for this service (though not for car-based ride-hailing, nor for motorcycle deliveries). While the regulation is regarded as the legal basis of online motorcycle taxi services, there are many criticisms and problems concerning the regulation, especially regarding the logic of ‘partnership relation,’ which is apparent in the law.
At the end of 2022, the Ministry of Transportation started the revision process of PM 12/2019; a new decree is expected to be established in the first half of 2023. One expected change would be the shift of authority to determine the motorcycle taxi tariff from the central government to local government. Having a regulatory focus on tariffs is important because the data shows that 50 of 71 driver protests from March 2020 to March 2022 asked for better tariff and incentive/bonus schemes. However, there are also downsides. Aside from the limitation noted above that this regulation only applies to motorcycle taxi services, one of the main weaknesses of the current tariff regulation is the lack of a clear punishment mechanism and enforcement system. While the shift of authority to local government does not necessarily answer these issues, it could open opportunities for local governments in Indonesia to develop their own initiatives to deal with this problem. However, The Ministry of Transportation should also ensure that the changes won’t create policy inconsistencies between different districts or regions.
It is important to note that despite its massive importance for some gig workers, the tariff is just one aspect of Indonesian gig workers’ issues. The changes in tariff regulation should be followed by other regulation changes, primarily related to the partnership agreement and gig workers’ protection. The Ministry of Manpower, as the ministry which administers government affairs in the field of labor and manpower, should develop clear legal bases for gig workers to protect their rights and ensure fair treatment. This can be achieved by creating new legislation or updating existing laws to specifically address the unique contexts and challenges faced by gig workers. Such regulation would clarify the legal status of gig workers and provide legal guidelines to ensure that: 1) they receive adequate compensation for their work, 2) are protected from exploitation and mistreatment, and 3) have access to health insurance and paid time off. Furthermore, such regulation would also provide better legal bases for other bodies such as the Ministry of Transportation and the Ministry of Communication and Informatics—which are also working closely on the issues surrounding gig work—to develop better regulations in their respective fields.
Lastly, the issue of unaligned regulation or policy inconsistency should always be taken into account in the policy-making process. In early 2023, the local government of Jakarta published a plan to implement Electronic Road Pricing (ERP) for private vehicles on 25 roads in Jakarta. Each private vehicle will be required to pay a specified amount of money (Rp 5.000-19.000) when they drive through the ERP roads between 05.00-22.00. Following the Law of Transportation (Law No. 22/2009) and Police Regulation No. 7/2021, all vehicles with white/black number plates are regarded as private vehicles. Therefore, once the ERP is officially in place, all regular cars and motorcycles are subject to ERP, including all online taxis and motorcycle taxis. Despite the establishment of PM 118/2018 and PM 12/2019 by the Ministry of Transportation as the legal base for online taxi and online motorcycle taxi practice in Indonesia, neither are acknowledged by the law as public transportation vehicles.
Regulations, as such, must be aligned to achieve their intended goals and avoid unintended consequences. This requires ongoing communication and collaboration between regulators, as well as consideration of the broader societal context in which regulations operate.