Transport costs make up the biggest expense for workers in SA

Most workers reported transportation costs as the biggest contributor to their work-related expenses. Picture: David Ritchie

Most workers reported transportation costs as the biggest contributor to their work-related expenses. Picture: David Ritchie

Published Sep 8, 2022


WHILE digital labour platforms held the potential to reduce the extremely high levels of unemployment and inequality in South Africa, the annual South African Fairwork ratings also provided evidence that platform workers, as in many countries worldwide, continued to face unfair work conditions and lack the benefits and protections afforded to employees.

This fourth Fairwork report for South Africa released on Thursday, continued to chart the evolution of the national platform economy.

In its executive summary, the report said the lifting of the National State of Disaster in South Africa in April this year, the COVID-19 pandemic reached manageable levels that meant a readjustment in working conditions for digital platforms and platform workers.

It said these adjustments must be made under challenging economic pressures, with inflation in South Africa at its highest levels since May 2009 and the price of fuel in the country at an unprecedented high.

The authors said that regardless of the sector in which platform workers operated, most workers reported transportation costs as the biggest contributor to their work-related expenses.

The 2022 report assessed 13 of South Africa’s largest digital labour platforms against five principles of fairness—fair pay, fair conditions, fair contracts, fair management, and fair representation, then giving each platform an overall fairness rating out of ten. This year saw adjustments to several of the Fairwork principles, namely: Fair Conditions, Fair Management, and Fair Representation. Adjustment to the principles are based on Fairwork’s ongoing research as well as feedback from stakeholders.

SweepSouth came out tops in the 2022 table with seven points, while getTOD, M4JAM and Mr D were tied in second place with six out of ten points.

For FAIR PAY, six platforms could evidence that workers’ pay is at or above the minimum wage, which in 2022 was R23.19/hour.

In FAIR CONDITIONS, seven platforms can evidence the actions they take to protect workers from risks that arise on the job.

Regarding FAIR CONTRACTS, six platforms were awarded the point for fair contracts by evidencing clear and accessible terms and conditions, with processes in place to notify workers of proposed changes to the contract in a reasonable timeframe.

With FAIR MANAGEMENT, arbitrary termination or deactivation is a big concern for platform workers, who lack the recourse available to formal employees.

On FAIR REPRESENTATION, which is about being able to freely organise is a key workplace right in most countries. In the South African platform economy the survey showed that there was still much that can be done to improve conditions in this regard as just three platforms could demonstrate documented mechanisms that assured that workers have freedom of association and freedom to express their collective voice.

The Fairwork South Africa team comprised of Sharon Geeling, Pitso Tsibolane, Kelle Howson, Mark Graham, Richard Heeks, Darcy du Toit, Jean Paul Van Belle and Murali Shanmugavelan said that further reforms were needed to move towards a fairer and more decent digital labour platform economy.

In its overview of the South African Platform Economy, Fairwork said that the South African economy has suffered a decade of successive crises, resulting in the contraction of production and employment rates, worsened by the crisis derived from the onset of the COVID-19 pandemic in 2020. During this period, the economy contracted by 6.4 percent.

It said that a growing number of South African workers look to multinational platform economy platforms like Uber, Uber Eats, Bolt, SweepSouth and others, to find work. However, in part because of its novelty, and the struggle of formal labour statistics to keep up, it said that there were no reliable figures on the scale of the South African platform economy.

It said that platform work touched at least 1 percent of the workforce; with this number growing by well above 10 percent annually. “We have previously estimated that there are around 30 000 workers in location-based platform work in South Africa, like taxi driving, delivery, and cleaning, and up to 100 000 actively undertaking online work, or ‘cloudwork’.”

It added that the post-pandemic opening up of the economy has seen some changes in the South African platform scene. The ride-hailing sector has picked up strongly with people returning to work, school, universities, and starting to travel-but with several public transport options such as local rail not yet fully restored. The market consolidated further, with Uber becoming the dominant player and Bolt the only viable alternative after Didi pulled out hardly a year after its entrance. However, the huge increase in the driver’s cost structure–especially the price of fuel–has eroded the margins of drivers since their earning rates have not kept pace.

This sector had also experienced a rise in the number of protests waged by workers over the last five years. These protests have resulted in violence, log-offs, and public demonstrations.

The e-delivery sector was described as perhaps surprisingly, appearing to have held onto its explosive growth afforded to it by the pandemic restrictions –having goods delivered to one’s home has clearly become an entrenched habit. However, 15 most fast-food and small deliveries were said to be only economical if done by light-weight motorbike; although this presents a lower barrier to entry, it means more drivers were fighting over the available work and it presents serious road safety issues on South Africa’s bike-unfriendly roads. Delivery drivers who used cars faced heavy competition, and some were finding it difficult to meet their fixed costs.

Looking into the future, Fairworks said that the South African economy entered the Covid-19 pandemic in an already weakened state, after a decade of low growth and high levels of inequality. “The post-pandemic economic outlook is further clouded by continuing rolling power outages associated with operational and financial difficulties at the state energy utility, coupled with high unemployment rates, high inflation and an unstable political climate.”