The international development research centre

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the Global Margins

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Helena Barnard*, Isis Hjorth, David Peter Simon MUS

Oxford Internet Institute, University of Oxford

Executive Summary 1

Introduction 2

Preface Executive Summary

About this report

Suggested citation

Graham, M., Lehdonvirta, V., Wood, A., Barnard, H., Hjorth, I., Simon, D. P. (2017). The Risks and

1 By economic margins we refer to economically disadvantaged
countries, those that fall in the categories of low and middle
income. These countries might also be broadly known under the
inadequate umbrella term “the developing world”.

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and the platforms that support it,9 might catalyse new, sustainable employment opportunities by
addressing a mismatch in the supply and demand of labour globally.10 Some of the world’s largest gig work platforms have put forth their business models as a revolution in labour markets, suggesting that they can help lift people out of poverty.11 More
broadly, it has been suggested that online gig work will have structural benefits on the global economy, such as raising labour force participation and
improving productivity.12

Against this background, the purpose of this report is to highlight the risks alongside the rewards of online gig work. It draws upon 152 interviews, a survey of 456 workers, and transaction data from one of the world’s largest online gig work platforms to reveal the complex and sometimes problematic reality of the “new world of work” in Sub-Saharan

Programme. New York, NY.

2 United Nations Development Programme. (2015). Human Development Report 2015. United Nations Development Programme. New York, NY.

Development Report 2015. United Nations Development 10 For example, The Rockefeller Foundation initiative Digital

Programme. New York, NY. Jobs Africa.

8 United Nations Development Programme. (2015). Human Development Report 2015. United Nations Development

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The history of online gig work is deeply embedded in the history of the Internet and international busi-ness process outsourcing. The idea that individual workers can meaningfully participate in the global economy through a combination of the Internet
and outsourcing begun around the 1980s with the concept of offshore outsourcing13 taking root in the modern business enterprise.14 American companies like General Electric and American Express were early adopters, moving business processes from the United States to India.15 These early relationships of offshore outsourcing ultimately influence today’s geographic diffusion of online gig work and can explain online gig work platform usage in parts of the Global South.

Offshore outsourcing: a very brief history

Moreover, economic geographers had earlier theorised shifts in the market, particularly stressing the ways in which the
new division of labour structured hierarchy and engendered inequality. See Fröbel, F., Heinrichs, J., & Kreye, O. (1980). The

new international division of labour: Structural unemployment

321-340. 18 Kimura, K., Omole, D. W., & Williams, M. (2010). ICT in

15 The Economist. (2013). Special report: Outsourcing and offshoring: Here, there and everywhere. Retrieved from http:// www.economist.com/blogs/schumpeter/2013/01/special-re-

of the market, skilled labour force, and enterprise innovation clusters) converging to solidify its front-runner status.20 While commentators once deemed India “the back office of the world”,21 businesses and business contractors today regularly look to other labour markets for cheap, qualified talent pools.

Much work moved to Southeast Asia, and some of our nascent research identifies Sub-Saharan Africa as a growing area of focus for business process offshore outsourcing.22

Online gig work platforms: how they structure and
champion contingent work

At their core, online gig work platforms act as a matchmaking service. They coordinate buyers and sellers of temporary contract work, regulating the individualised, temporary relationship between
buyers and sellers in a similar fashion to traditional labour intermediaries. “Online gig work” itself refers to contingent work25 that is transacted and delivered via online platforms. In this environment, workers undertake a number of more or less overlapping tasks rather than having a single job role. For
instance, a job on an online gig work platform could exist in the form of a temporary graphic design
project, which itself might refer to a bundle of
Photoshop tasks. These tasks could be any number of different things, including more mundane tasks such as data entry.

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Methods

45 participants from Southeast Asia and 80 from

Online gig work: a promising
alternative to traditional employment?

Transaction data was generously provided for
this research by a major online platform in an an-onymized form. All the data sources are described in more detail in the Methodological Appendix.

going research has been to examine the relationship
between online gig work, Internet-based platforms,
and worker livelihood. Our objective has been to
examine how online service work takes shape in
Africa and Asia, assessing the positive and negative
experiences of workers and highlighting the ways in
which their stories differ from public narratives.27

Rewards of online gig work Risks of online gig work

Higher incomes for some Oversupply

“For me, it’s a high paying job, because now, I was able to afford an apartment, pay my own

though the numbers exclude successful workers who have made their profiles invisible to public

Autonomy and task diversity

Online gig work can be very interesting and
stimulating. Our survey results show 53% of
workers responding that they strongly agreed their job involved solving complex tasks, compared to just 13% who disagreed or strongly disagreed.

2Total searchable worker profiles on 7 April 2016.

3Searchable worker profiles with at least one hour billed or $1 earned.

Amanda, a South African worker explained:

“There’s a lot of people out there, if they’re not satisfied with you, they are going to try somebody else … So they can replace you. This is one of those jobs that you can be replaced.”

“I would get a bounced email saying that only workers in the United States are allowed. Yes, so if you put your address there, they would not hire you because you’re from the Philippines. That’s how racist some companies are.”

Quantitative analyses of transaction data offered partial support for these qualitative experiences. We found evidence of so-called “statistical discrimina-tion”, where clients on average assume that workers

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from low- and middle-income countries provide less valuable work than workers from high-income countries, unless the worker has evidence such as testimonials from previous clients that attest to the high quality of their work. This causes workers

Several reports highlight the benefit of being able to work from home in online gig work.30 However, many successful workers have little option but to work from home, which can lead to social isolation. Our research shows that some workers feel detached from others with limited opportunities to interact with people outside their family. In fact, 74% of survey respondents say they rarely or never communicate face-to-face with other people who use platforms. As Sarah, a South African worker, put it:

Sharon, a Kenyan, said that she puts in

Opacity and taxation

Survey responses suggest that workers rarely
understand their clients, with 10% admitting they do not even know the name of the person who hired them. Moreover, 70% indicated that they would like to know more about the person they are working for. This lack of connection is important, as it alludes to a loss of a shared understanding. This informality and the uncertainty over legal responsibilities it en-

31 For example, in conversations with the team working on Nigeria’s Naija-cloud project, many expressed the idea that it would allow Nigerian workers to cut out the middlemen and utilize the platform to recoup cost when companies didn’t properly pay for work.

platforms to create a range of contract types which cater for different categories of workers. These could include: self-employed contractor (for workers who can be considered equal parties to clients due

head-on. to having multiple clients and an ability to attract

Forms of discrimination, based on nationality, exist on gig work platforms. A possible way to decrease their incidence could be to eliminate the prominent display of nationality on worker profile pages, at least for the vast majority of online gig work where the location of the worker per se should have no bearing on their ability to do the work. Having said that, platforms should still establish a firm place of work in order to ensure that relevant local regula-tions are adhered to. Nonetheless removing explicit mentions of nationalities could diminish opportuni-ties for platforms to be used in discriminatory ways.

Will online gig workers receive formal employment contracts in the future?

Strengthening workers’ voice would not only benefit workers but perhaps also help platform engineers design and implement platform features based upon detailed worker feedback and suggestions. This in turn could benefit productivity. It is possible to create novel forms of incorporating worker voice into plat-form governance and decision-making processes.

For instance, a voting system could allow workers to have a say in which features are implemented and discuss how changes to terms of services will impact daily work. Furthermore, the creation of plat-form-based independent worker networks could help promote worker solidarity and voice (in the simplest terms, this could be a feature akin to Facebook
groups or sub-Reddits). Ultimately, workers will have more bargaining power and develop skills faster if

Will governments need to limit online gig work monopolies?

Online gig work platforms tend to benefit from
positive network effects. This is a phenomenon whereby each additional user increases the value of the platform for all users. For example, a social media or auction platform is of more value to its users the more users there are.33 The network effect can make it difficult for new platforms to compete with established ones, and thus creates a monopoly opportunity. If a monopoly were to emerge in the online gig work economy, then rent-seeking
behaviour34 could become a problem for workers everywhere.

In the United Kingdom, the Labour Party’s leader during his leadership campaign promoted a strategy of cooperative ownership of online platforms for distributing labour and services.35 There is also an ongoing vigorous discussion amongst the academic community and wider civil society about the benefits of worker-owned cooperatives.36 Advantages of platform cooperatives include that their democratic structures institutionalise worker voice, meaning that their interests feed directly into the design and operation of platforms. Additionally, profits are not diverted out of business through payments to own-ers or shareholders. Profits could instead be used to fund schemes that benefit workers. For example, platform based health insurance and hardship funds could be created and accessed on a pro-rata basis

Transfer: European Review of Labour and Research.

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determined according to each worker’s contribution to the platform’s revenue in the previous six months.

towards traditional unions exists amongst free-
lancers. Therefore, looser worker networks (such as groups like the ‘Freelancers Union’) could be effective channels for enhancing worker voice. Such networks could overcome negative dispositions towards unions and strengthen worker solidarity while providing coordination and direction to the disparate online worker groups which already exist.

To what extent will companies be held accountable for poor working conditions?

In what ways can existing groups be leveraged to promote solidarity?

Online workers come from a variety of backgrounds and have varied, sometimes diverging interests: this means that they currently are more likely to compete rather than collaborate with one another. Unions historically have been effective at organising workers by threatening to withdraw labour power.38 Collective bargaining can be very powerful, much more so than individualised bargaining.

Some of the authors of this report have prepared a more detailed outline of a plan for a Fairwork Foundation (https://www.oii.ox.ac.uk/publications/

Methodological
Appendix

Interviews Transaction data

on four of the largest online labour platforms,

though the interviewees also used a variety of
other platforms. Workers were shortlisted based on a range of predefined sampling criteria, including types of work performed, feedback profiles, platform membership duration, hourly rates, gender and location. The main sampling goal was to ensure varied representations of experiences in the coun-

We also present results from a stratified-sample
survey of 456 workers in Southeast Asia and
Sub-Saharan Africa, conducted in 2016. The
respondents were recruited by posting an online
survey as a job task on two of the largest online
labour platforms. Workers from Southeast Asia
(excluding Singapore and Brunei) and Sub-Saharan
Africa who had been active in the last two months
and had completed at least five hours of paid work
or had five or more feedback ratings were invited
to complete the job task in return for $3. Workers
were also filtered to avoid repeat respondents
and to achieve a stratified sample of nationalities,
genders and skills. The survey was timed to take
approximately 30 minutes. Response rates to the
job task invites were 30% and 7% on the two plat-
forms respectively. These are low response rates
by conventional social survey standards, but an
improvement upon much Internet survey research,
which relies on respondents self-selecting, so that a
response rate cannot be measured.

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This cartogram depicts countries as circles sized according to dollar inflow during March 2013 on a major online labour platform. The shading of the inner circle indicates the median hourly rate published by digital workers in that country: median wages are, perhaps unsurprisingly, low in developing countries. Why do digital workers in the Global South have less bargaining power than their counterparts in the North? We are grateful to Stefano De Sabbata, Claudio Calvino, and Sanna Ojanperä for help with the graphic. See discussion and image scales: https://www.oii.ox.ac.uk/uneven-geographies-of-digital-wages/

Oxford Internet Institute | University of Oxford | January 2017
Funder: International Development Research Centre (IDRC)