Indonesia benefits from a large productive-age population, fueling economic growth. However, industry innovations and disruptions bring new challenges, particularly for Gig Workers. In a recent study, KANTAR delved deep into one of the most discussed challenges following the boom of workforce and human capital in Indonesia, which is the challenges of Gig Workers. The study seeks to explore and understand the different conditions and partnership models of key sectors and industries such as Transportation and Logistics, Construction, Fisheries, Agriculture, and other various services.
Gig Workers: Flexibility Shadowed by Income Uncertainty and Job Insecurity
Defining “Gig Workers” varies by context, complicating consensus on a single definition. Generally, Gig Workers can be identified by three main characteristics: they do not receive a regular salary but are paid per task, order, outcome, or hours worked. They work under short-term contracts without full-time employment status, and they have flexible working arrangements, either fully or partially, especially in terms of work schedules. While this flexibility is appealing, it often results in income instability, job insecurity, and unclear boundaries of rights and obligations. This flexibility is indeed one main appeal point for Gig Workers but also lies a more unfortunate flipside of this flexibility, which is observed in the uncertainty and instability in terms of income, job security and clear boundaries of rights-and-obligations.
There are 3 distinct aspects used as a framework to identify and differentiate gig workers in Indonesia: Compensations, Contracts, and Flexibility in working. Apart from Compensations and Contracts, which are the shared elements among the various types of Gig Workers, flexibility is proven to be the primary differentiating factor for Gig Workers from other informal workers, and even between Gig Workers themselves.
How Large Is the Population of Gig Workers in Indonesia
The Indonesian Informal Workers population accounts for approximately 84.2 million people, which, according to the National Labor Force Survey (SAKERNAS or Survei Angkatan Kerja Nasional) rolled out by the Central Agency of Statistics (BPS or Badan Pusat Statistik), represents approximately 60% of the total active labour force. Of this total, there are around 41.6 million Gig/Independent Workers, who make up 50% of the total informal workforce (this distinction is made to differentiate between paid workers and those who are unpaid labourers or categorized as business owners).
In Indonesia, Gig Workers mainly populate the Agricultural, Forestry and Fishery sectors, followed by the Retail, Automotive, Manufacturing and Construction sectors respectively. However, the study also identified that Gig Workers in those sectors does not conform strongly with the general definition of Gig Workers and often works under the arrangement as labourers – commonly referred to as unskilled blue-collar workers.
Among the independent workers, approximately 39.6 million are identified as blue-collar Gig Workers, distinguishing them from white-collar counterparts. The service industry houses nearly 25% of the aforementioned Gig Workers, where this category notably includes the highly discussed, tech-focused roles like online car and motorcycle hailing services, which make up about 1.8 million or 4.6% of the Gig Workers.
Therefore, despite the close association of Gig Workers with flexibility and technological openness, a major part of the demographic in Indonesia particularly still resides within the traditional as well as informal sectors that demand intensive physical labour.
What Are the Challenges in the Compensation System and Welfare Protection?
The compensation system for gig workers is commonly either of these two: basis of working hours or time-based and or achievement based.
An interesting point surfaced among digital tech-based gig workers, where the “profit-sharing” model is particularly prevalent, often observed as a misunderstanding where it is perceived as a “deduction”, subtracted from their actual income, on contrary to its actual definition. This negative perception usually arises due to the lack of understanding from Gig Workers themselves but is also further enabled by a lack of transparency from companies. As a result, Gig Workers often see this payment method, as well as employers, in a negative light.
Gig Workers often miss out on benefits like health insurance, protection from work-related accidents, and opportunities for training or career development. Very few businesses provide full insurance for Gig Workers. Most companies only register them for the BPJS Kesehatan (Indonesian National Health Insurance) program and offer minimal protection against work accidents, particularly in the transportation and logistics sectors. This shows that the welfare of gig workers is far from ideal, especially for those in high-risk jobs.
What Are the Uncertainties for Gig Workers in Indonesia?
Many Indonesian Gig Workers face challenges due to the absence of written contracts, often relying on verbal agreements without clear terms of rights and responsibilities, especially in the informal sectors. A few groups of Gig Workers have written contracts, typically in digital sectors like Transportation and Logistics. These contracts are usually set up as partnership agreements rather than employment contracts, offering some security and clarity on rights and responsibilities. The lack of written agreements leaves many Gig Workers vulnerable to poor conditions and unfair treatment, as their rights are often overlooked.
The Various Degrees of Flexibility Among Gig Workers
Flexibility has been a key aspect that embodies the uniqueness of gig workers from other informal workers. There are 3 indicators that measure the extent of flexibility in a Gig Worker:
1. Autonomy - Gig Workers can seek and choose their own work.
2. Workday Control - Gig Workers can decide whether they wish to work or not, pertaining to workdays.
3. Time Ownership - Gig Workers can set their own work hours freely and are not bound to any fixed schedules. On top of the 3 main aspects, Gig Workers are Non-Exclusive - not bound by exclusivity towards a certain company, as they are freely able to work with whoever and wherever they want.
Depending on the level of flexibility, Gig Workers can be separated into 3 groups: Fully Flexible, Partially Flexible, and Non-flexible.
- Gig Workers who are "Fully Flexible" have total control over their activities. They typically work with digital tech companies, such as ride-hailing drivers and online domestic service providers. Conventional taxi drivers and agents also enjoy full flexibility.
- "Partially Flexible" Gig Workers work on shifts, choosing whether to work on a particular day but following a fixed schedule. Examples include bus drivers, hotel receptionists, and third-party logistic couriers.
- "Non-Flexible" Gig Workers have traditional labour setups, despite not being formally recognized as workers or partners. This is common in the construction, agriculture, and fishery sectors, as well as among conventional businesses and service providers.
One notable finding is although flexibility is frequently cited as a defining characteristic of gig work, many are actually engaged in the Non-Flexible grouping, where it also covers a significant population out of the top 5 sectors by worker population in Indonesia.
How Diverse Are Gig Workers in Terms of Skills and Sectors?
The large number of gig workers in Indonesia is extensively spread across different sectors, creating large diversity in the shaping of conditions and groups of Gig Workers. This high variance presents another challenge in coming up with a comprehensive image incorporating every sector and sub-groups involving Gig Workers.
The absence of a clear definition of “Gig Workers” amplifies the complexity to determine their exact number and understand their conditions. Different studies define Gig Workers differently, ranging from street vendors to those who use digital technology. However, using an analytical framework based on Compensation, Contracts, and Flexibility, it is evident that Flexibility is the key factor that can help categorize Gig Worker partnership models in Indonesia. This approach gives us a clearer picture of their current state and conditions.
One apparent observed trend was how the existence of “digital intermediaries” (usually referring to digital-tech based companies and services such as food delivery applications or ride-hailing applications) helps enable Gig Workers to achieve Category 1 Full Flexibility. Additionally, they tend to also provide a clear cooperative agreement as partners for Gig Workers.
Is There a Clear Direction for the Welfare of Gig Workers?
Despite the high flexibility of Gig Workers, a major portion of these workers in Indonesia are still facing less ideal welfare, primarily in high-risk sectors. In more “traditional/conventional” sectors such as Agriculture, Fishery and Construction, there are almost no written agreements implemented. This shows that despite Gig Workers' appeal primarily in their flexibility, working conditions still would prove to be their largest challenge, particularly in less regulated sectors.
Although recent labor law changes have complicated conditions for gig workers, specific regulations addressing their needs are still lacking. Established digital platforms have introduced welfare programs to support gig workers, but achieving a balance that sustains livelihoods and provides necessary protections remains a challenge. This calls for collaboration between public and private sectors in policy making and problem-solving to adapt to the evolving global labor landscape.
About this study
This study employed a mixed methodology to explore gig worker partnership models in Indonesia. Primary research comprised 16 Focus Group Discussions (FGDs) with Gig Workers from diverse sectors, providing firsthand insights into their experiences and challenges. Complementing this, In-Depth Interviews (IDIs) were conducted with six employers or intermediaries to garner their perspectives on partnership models and Gig Worker management. Additionally, the research included discussions with a panel of academic experts from top Indonesian universities and labour union representatives to understand the regulatory, policy, and social dynamics affecting gig workers.
Secondary research involved analysing data from the National Labor Force Survey (SAKERNAS) managed by BPS to estimate the number and distribution of Gig Workers across various sectors. This was supplemented by online research to provide a comprehensive analysis. These combined efforts aim to offer informed recommendations for developing inclusive and sustainable work policies and practices for Gig Workers in Indonesia.
To learn more about Kantar Indonesia's capabilities or if you would like to explore potential collaborations, we are always open for discussion on how our qualitative insights can create a meaningful impact for you, your brand, or your business. Reach out to Putu at putu.aditya@kantar.com or Abimanyu at raihan.abimanyu@kantar.com.
Putu Aditya
Qualitative Associate Director at Kantar Insights Indonesia
Raihan Abimanyu
Qualitative Research Manager at Kantar Insights Indonesia
*However, due to the lack of any definitive categorization relating to ‘Digital tech-based/Online Transportation Workers’ from SAKERNAS, the mentioned figure can and will fluctuate when accounting for individuals who may work part-time as online car/motorcycle hailing services and or individuals who works multiple jobs and didn’t declare or mention his or her online car/motorcycle hailing services job in the survey.