Ride-sharing, food delivery firms in country fail fairness standards

Ride-sharing and food delivery platforms have grown rapidly in the country in recent times, engaging millions of unemployed people in income-generating activities. But new research by Fairwork Bangladesh, a collaboration between DataSense and the University of Oxford, has found that workers in these platforms often face low pay, and risky and exploitative conditions.

According to the report released on Wednesday, 10 of the most popular gig economy platforms in Bangladesh, including Pathao, Uber and Food Panda, have been rated according to how fairly they treat workers and none of them has received more than one point out of ten.

The gig economy refers to a free market system where short-term and flexible work is prevalent, and businesses frequently recruit independent contractors, project-based workers, and freelancers rather than full-time employees.

The study finds that six out of the 10 companies – Car Bangla, Hungrynayki, Obhai, Shohoz Foods, Truck Lagbe, and Uber – have failed to prove they meet any of the minimum standards of fair work such as ensuring that all workers earn above the national minimum wage.

In fact, the report finds that a proportion of workers of ridesharing comapanies are in platform debt, meaning their costs exceed the income they receive from the platform. Working through middlemen, high platform commissions and maintenance costs, and lack of platform accountability were the most important factors leading workers into debt.

This is the first study of its kind in Bangladesh, scoring companies on labour standards such as pay, conditions, contracts, management, and representation.

Dr Murali Shanmugavelan, lead researcher at Fairwork Bangladesh's, said: "For the first time we have looked at companies offering rideshare and delivery services to rate them on how they treat their workers. This provides a helpful guide for both regulators and customers who use these platforms."

The new report, "Fairwork Bangladesh ratings 2021: Labour standards in the gig economy" is co-authored by Ananya Raihan, Murali Shanmugavelan, Sayema Haque Bidisha, Anita Ghazi, Tasnim Muhammad Mustaque, Sabrina Mustabin Jaigirdar, Raiyaan Mahbub, Matthew Cole, and Mark Graham. It was funded by the Federal Ministry for Economic Cooperation and Development (BMZ), commissioned by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

Co-author Dr Ananya Raihan said, "The study actually revealed how the platforms were short of sight in taking care of the platform workers. I believe, in the following year, the scores of platforms should improve significantly by taking appropriate steps. We look forward to working together on this."

Publishing the study, researchers from DataSense and the Oxford Internet Institute have called for stronger protections and more robust labour standards in the Bangladeshi platform economy.

While giving a presentation during the virtual report launching event on Wednesday, Sayema Haque Bidisha, co-author of the study and a professor of economics at Dhaka University, said the gig economy is a potential sector in Bangladesh because it is flexible and dynamic. As there is a lack of diversification in terms of labor-intensive industrialization in the country, gig based activities can serve as a crucial means to create employment opportunities here, she observed.

But there are challenges too, especially due to its informal nature, Bidisha pointed out.

Such platforms involve multiple stakeholders, which is why sometimes their operations become difficult at times, she said, adding a lack of information, monitoring and regulatory framework, Internet connectivity, are some major challenges for the gig economy.

During another presentation, Sabrina Mustabin Jaigirdar, research manager at DataSense, said the freelancing segment of Bangladesh's platform-based gig economy that started journey in 2016 with the arrival of Uber includes some 5,00,000 active workers and about 3,00,000 of them are engaged in location-based gig work.

The current size of the ride-sharing industry in Bangladesh is $259 million, which is likely to reach $1 billion in the next five to seven years, she said. Gig workers fall within the definition of worker as defined in the Bangladesh Labour Act, she added.

Barrister Anita Ghazi Rahman, chairperson at iSocial, emphasised the need for formulating a proper policy framework to guarantee the protection of gig workers.

Inam Ahmed, editor of The Business Standard moderated the programme.

A food delivery man can earn Tk 15,000-20,000 a month, which is almost twice that earned by a garment worker, said Maksudul Islam, public affairs director of Foodpanda.

"On top of that, they have flexible working hours. They can chose when to work and when to take time off," he added.

Belal Ahmed, General Secretary Dhaka Ride Sharing Drivers' Union, pointed out several problems – excessive commission for service providers, a lack of safety in the workplace, undermining workers' rights, and a lack of insurance facility for workers.

He called for proper policy formulation to streamline the ride-sharing sector in the country. He also called for raising awareness among share rides about the gig economy and the relevant laws.

Professor Mark Graham, professor of Internet Geography at Oxford Internet Institute and Director of Fairwork, said, "The low scores of many popular platforms in the Fairwork Bangladesh league table demonstrate the need for regulatory intervention to ensure gig workers are no longer falling through the cracks, further exacerbated through the pandemic.

"As part of our vision for a fairer future of work, we're setting out a pathway to realize that ambition through the launch of the Fairwork Pledge. We urge organizations and investors to sign up to the pledge today and help our vision of fair work become a reality for all platform workers."

This latest report builds on the findings of previous country-specific Fairwork ratings reports for India, the United Kingdom, Germany, South Africa, Chile, Ghana, and Ecuador. The Fairwork team has also published reports on the impact of Covid-19 and the gig economy.