As an increasing number of policymakers, governments and international development organizations focus on online platforms as an economic development strategy, and to increase employment, it becomes important to better understand how digital labor and the rise of the gig economy create a need to reconsider, or perhaps, reinvent the social contract.
In the world of work, citizens, the state, and the market are continuously interacting, and their relationship evolves constantly. As a result of this process, an implicit social agreement, or social contract, often emerges that broadly determines the relationship between the actors and establishes guiding principles
Online platforms are creating jobs for some of the world’s poorest by leveraging connectivity, and the willingness of an increasing number of companies to outsource business processes. Online gig work has the potential to have structural benefits on global economies, by increasing labor force participation and improving productivity. However there are costs associated with these gains that must be taken into consideration by policymakers. A recent study based on responses from a 456-respondent survey and stories from 152 interviews on the experience of workers in the gig economy in Southeast Asia and Africa, showed that while many workers are enjoying increased income and autonomy, they also reported experiencing job insecurity, social isolation, long hours, and in many cases, a light or non-existent social safety net. While these issues are not new in the world of work, platforms workers face some unique obstacles to rectifying them.
During rapid economic change in the past, workers have formed labor organizations to advocate for their needs and interests. But that organizing often presumed “a single employer, a single workplace, and a set of duties and obligations that can be structured around a contract that stays in place for several years”. But given the moves away from full-time work and direct employment, these factors are no longer relevant. It is also rare that national labor laws are applied to digital workers. These issues are particularly acute when transactions cross national borders, as it becomes unclear which jurisdictions’ regulations apply. Furthermore, workers face difficulties organizing when an online platform for example based in the US, has workers from across the Asia-Pacific and globally, logging in and competing against one another for work.
Some suggested possible directions for addressing these issues are as follows.
- A Fairwork Foundation and certification program: Mark Graham from the University of Oxford suggests something similar to a FairTrade Foundation that inspects sites of products such as chocolate, coffee, or tea. He proposes something similar, a “Fairwork Foundation” that could be created as an enforcement mechanism, ensuring that platforms pay living wages, and enforce decent working conditions. At the moment, clients and platforms that ignore local labor laws and provide the worst wages and working conditions have an advantage in the market. A Fairwork Foundation could change this. Many platforms and organizations already provide workers with strong protections and working conditions would benefit from this kind of seal of approval. “This certification could also help people choose platforms, apps, and websites that genuinely offer fair working conditions to workers.”
- Portable Benefits: As stated in a 2015 article in the Democracy Journal, “An economy based on micro-employment requires the accrual of micro-benefits.” In line with this thinking, workers’ groups are pressing for legislation in many cities and countries around the world (where the work for platforms is taking place) that charges a fee on gig-economy transactions. The funds are then placed in an independent fund that would provide what are known as “portable benefits”—benefits that would accrue over time, and that a worker can access even if she/he moves from job to job. For example, the executive director of the Benefits Fund for the Independent Drivers’ Guild, which represents more than 45,000 for-hire drivers, including Uber and Lyft drivers, in New York City, stated that “With 5 percent of every transaction, we could get workers access to a whole suite of benefits. I don’t think companies are going to take the lead on this, they are too skittish about being viewed as employers. But I do think cities and states can take the lead on this very easily.” These kinds of portable benefits would require a contribution from employers which are benefiting from digital worker contributions. Portable benefits however that are optional and taken from a workers’ income, generally do not have high participation rates. Other models of portable benefits are being explored by entities such as Google.org which is working with the National Domestic Workers Alliance – Fair Care Labs, the Aspen Institute, and others.
- Platform Cooperatives: The platform cooperative movement was initiated by both businesses worried about disruption and competition posed by platform giants and by gig economy workers themselves who were unhappy with the poor deal they were getting. While it has not yet reached Asia, the platform cooperative movement is worth noting given the growth in worker-owned platforms, particularly in North America and Europe. A directory of platform cooperatives is available to demonstrate the range of organizations and businesses providing services through this unique model.
While online platforms provide exciting opportunities to maximize the growth potential of digital economies, these and other ideas on reinventing the social contract are worthy of exploration.
 Christina Behrendt, Isabel Ortiz, Emmanuel Julien, Youcef Ghellab, Susan Hayter, and Florence Bonnet, International Labor Office, Social Contract and the Future of Work: Inequality, income security, labour relations and social dialogue, p. 1, http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_534205.pdf, last accessed January 8, 2018
 Graham, M., Lehdonvirta, V., Wood, A., Barnard, H., Hjorth, I., Simon, D. P. (2017). The Risks and Rewards of Online Gig Work At The Global Margins. Oxford: Oxford Internet Institute https://www.oii.ox.ac.uk/publications/gigwork.pdf
 Rahman, K. Sabeel, “Reinventing the Social Contract”, DRAFT, September 2016, p. 11, http://rooseveltinstitute.org/wp-content/uploads/2016/09/Rahman-New-Social-Contract.pdf, last accessed January 8, 2018.
Image credit: Karl Grobl