‘Jobbing’ their way through unemployment apocalypse
The gig economy’s ‘independent contractors’ are left high and dry during the lockdown, but local start-ups show how it can be done
A scathing local report by labour outfit Fairwork has admonished Uber Eats, Bolt, Mr D and OrderIn, saying the gig-economy firms have failed to take responsibility for workers’ lost wages during the Covid-19 lockdown.
Fairwork, a collaboration between the universities of Cape Town, Oxford, Manchester and others, says cleaning app SweepSouth and tech start-up M4Jam are the only SA gig-economy firms to have offered some compensation for the loss of pay experienced by workers.
Fairwork defines gig workers as those performing short-term tasks for digital platforms such as Uber, Uber Eats and SweepSouth.
With about 35,000 workers in taxi driving, delivery, and cleaning, and up to 100,000 actively involved in other types of digitally mediated freelancing, Fairwork estimates that gig work "touches at least 1% of the SA workforce, a number growing by well above 10% a year".
Given the average household size in SA, gig work may "directly touch the lives of up to half a million people; making it an important economic and social issue for the country," says Fairwork in its Covid-19 and SA’s Gig Workers report released this month.
Micro-jobbing and micro-learning platform M4Jam uses informal spaza shops to distribute food parcels. M4Jam’s users, who are referred to as "jobbers", complete small, market-research jobs or in-company training modules in exchange for rewards such as cash, vouchers and points.
Because business has closed during the lockdown, a number of jobbers had no money to feed their family, says CEO Georgie Midgley. As a solution, people using the platform complete small tasks and receive a voucher to get food items from spaza shops in lieu of payment. In turn, spaza shop owners are paid for the goods they pass on.
Midgley says M4Jam has about 300,000 jobbers on its platform, with the company having raised over R550,000 so far for the food parcels.
The value of a hamper collected from the average spaza shop is about R300, and includes toilet paper, soap, maize meal, cooking oil and canned foods.
For a long time, companies such as Uber have argued that they are merely facilitators of job opportunities for "independent contractors", rather than employers of workers. This attitude has extended into the economic crisis brought on by the lockdown.
Fairwork says the nonstandard employment status of gig-economy workers has proved to be a particular challenge at this time.
Fairwork’s survey suggests that most gig workers have lost their jobs entirely, while those able to work during lockdown have, on average, lost four-fifths of their income. As a result, many reported that just getting food to eat was their top priority.
With a core team of 44 spread between Joburg and Cape Town, Midgley tells the FM that the lockdown has caused M4Jam to lose location-based work. Its connection with spaza shops was a result of a project to map these businesses across SA, and this had to be halted when the lockdown started.
Where possible, the platform offers work that jobbers can do from their homes.
The business was launched in 2014 and was later bought by Naspers, which invested about R20m as part its WeChat Wallet business, before being bought out by DNI, a former subsidiary of listed technology group, Net1. Now M4Jam is owned in part by a consortium of M4Jam’s management and DNI.
M4Jam’s business has recently broken even, says Midgley. However, for the moment, it hopes to just cover overheads and keep the lights on during the crisis.
"We’re a corporate, not a charity. But right now, it’s not about making money for us."
Midgley says M4Jam has enough reserves to cover its costs for about a year. The staff have not had to take pay cuts.
Despite the bleak state of the gig economy, she is confident that it will be one of the first sectors to bounce back when the recovery really begins. As business activity starts to tick up again, organisations are likely to turn first to nonpermanent staff and contractors to get work done.
Midgley estimates that M4Jam could double its jobber count based on the renewed interest already shown in the company.
Ultimately the survival of companies during this time may come down to adapting and changing their businesses to save operations and jobs, while at the same time accounting for social impact, says Alison Collier, MD of Endeavor SA, a management consulting firm offering services to small to medium companies.
Collier believes an example is cleaning tech start-up SweepSouth, headed by Aisha Pandor. Because of social distancing, requests for cleaning services at private homes fell. The firm has shifted to offer cleaning for corporate clients.
By doing this, SweepSouth has been able to continue generating revenues while ensuring that its staff have work, says Collier.
SweepSouth has also put together a R12m fund to provide its staff with basic necessities for the next three months.