E-Commerce & tHE gIG-WORK

The Pool of Exploitation

Team x
INF3014F
Table of Contents
Introduction............................................................................................................................2
Intersection of Gig Work and E-Commerce...............................................................................3
Advantages of Gig Work.........................................................................................................4
Critical Analysis of Gig Work in South Africa............................................................................6
Addressing Exploitation in the South African Gig Economy......................................................9
Conclusion.............................................................................................................................12

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 Introduction

From bustling cities to townships, a digital revolution is underway in South Africa.

Technological advancements and e-commerce have altered the essence of the retail landscape,
particularly by disjoining physical presence and purchasing (Goga & Paelo, 2018). E-commerce
has created many sub-sectors, or ‘micro-economies’ – for example the gig economy – which
allow organisations and individuals to partake in the broader digital economy (M4JAM, 2021).
There is both promise and challenge amidst this revolution, and it is imperative that South
Africans understand what this means for the future of business and the working environment.

The gig economy, defined by short term work opportunities through digital platforms, and the
increased prevalence of e-commerce, has changed the way that business is conducted (Anderson,
2023). This paper explores the intersection between e-commerce and gig work, examining their
relationship and the implications it brings for South Africa. It also aims to address these
implications, positive or negative, and provide insight into potential methods of doing so.

Defining a “Gig”
A gig refers to a job or piece of work that is completed for a set fee. The work is usually on a
short-term or freelance basis. Gigs are done frequently by gig workers in the gig economy, where
people make money through short-term contracts or freelance labour - rather than traditional,
long-term employment (Stewart and Stanford, 2017).

The “gig economy”

The gig economy is an economic system in which companies employ independent workers for
short-term contracts or freelance work rather than permanent employment (Stewart and Stanford,
2017). This is all made possible through digital platforms that connect gig workers with clients.
It gives workers more freedom and autonomy, but it lacks the job stability and benefits that come

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with regular employment. The gig economy is often made out to be something that it is not. A
system where everyone wins, but this is far from the reality of it.

Intersection of Gig Work and E-Commerce

Delivery Services: A lot of gig workers, including those employed by Uber Eats, MrD, or
Checkers sixty60, play a pivotal role in getting products from warehouses or stores directly to
customers' doorsteps. Orders are picked up from retailers or warehouses and delivered right to
clients' doors. Essentially gig work removes the role of the middleman, the consumer, from
going to the store physically (Lim et al., 2023).

Freelance services for e-commerce platforms: Web development, graphic design, content
writing, digital marketing, and customer assistance are just a few of the services that e-commerce
platforms frequently need. These services can be provided on a project basis to e-commerce
companies by gig workers, who are frequently independent contractors. A recent study shows
that over 57 million people adopted the freelance lifestyle in the United States alone last year,
looking for the freedom and independence that regular professions no longer provide
(Webinopoly).

Order fulfilment: To help with order fulfilment activities including selecting, packaging, and
shipping goods to clients, e-commerce companies can employ gig workers. In times of high
demand, such as during peak seasons, this can be extremely helpful (Lim et al., 2023).

Product Reviews and Influencer Marketing: Influencers and reviewers in the gig economy
may engage with e-commerce companies to market products through reviews, sponsored
content, or affiliate marketing. This helps boost sales and brand recognition (Lim et al., 2023).

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 Advantages of Gig Work

There are several benefits to operating in the gig economy that are recognised by both the
company and the employees.

Business benefits
Reducing expenses and costs is generally regarded as one of the main advantages of participating
in the gig economy. This is due to the fact that companies can now hire employees who work
off-site, thus reducing the need for costly workspaces and expansive offices. Employing
independent contractors also totally removes the need for costly overhead like paid sick days,
retirement plans, and benefit packages for employees (Palhad et al., 2023).
Companies sometimes lack expertise and skills which can be found in the gig workforce.
Utilisation of the gig economy by businesses helps them to engage workers with specific skill
sets needed for particular activities and projects, thereby giving them the benefit of a large talent
pool that may help improve their performance (CFI Team, 2023).

Gig workers are usually driven to do projects quickly and well. This can result in quicker project
turnaround times for tasks like content production, product listings, and website upgrades,
enabling companies to be flexible and responsive in the cutthroat world of e-commerce. It has
been found that hiring independent contractors that add immediate value can increase a business’
productivity and efficiency (CFI Team, 2023). The emphasis on task-focused hiring in the gig-
economy pushes independent freelancers to deliver exceptional work under tight deadlines.
Consequently, companies can boost output, reduce time to market, and simplify procedures (Lim
et al., 2023).

Utilising gig economy work allows organisations to rapidly expand or contract depending on the
demand. This comes in handy especially when there is a sudden increase in demand for a
particular service but no need for an enduring workforce.

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Employee benefits
In the gig economy, independent contractors are free to work anywhere they choose—instead of
in offices. It ranges from someone producing articles from a home office to someone driving for
Uber from their vehicle (Expert360, 2024). Gig workers have a lot of autonomy and control of
their work.

Workers in the gig economy also have the benefit of flexibility as they are able to choose which
jobs they would like to do, when and where they would like to do them. The flexibility to work
from home facilitates juggling the demands and timetables, which is attractive to those with
families (Palhad et al., 2023).

Gig workers also have the advantage of having the opportunity to take part in a variety of
different jobs. Employees have the option of doing gig work which can be continuously
changing, for instance completing a new project for different companies. This can make work
more exciting and less monotonous in comparison to normal jobs (Expert360, 2024).

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 Critical Analysis of Gig Work in South Africa

The connection between e-commerce, gig work, and unemployment in South Africa raises
concerns about worker exploitation, job insecurity, and insufficient social protection. While gig
work offers opportunities for income generation and economic participation, as well as the
benefits mentioned prior, it also poses challenges regarding labour exploitation, lack of job
security and exposure to health and safety risks.

Labour Exploitation
 Precarious Work: Gig workers lack regular employment, fixed salaries, and benefits like
health coverage or paid time off. Platforms may exploit their vulnerability to maximise
profit instead of treating them fairly.
Example: In 2021, Uber Eats drivers in Cape Town protested low wages and lack of basic
protections, highlighting the precarious nature of their work (News24, 2021).

 Unregulated Wages: Platforms may set low wages or use bidding systems that drive
down wages, limiting negotiation opportunities for workers. In South Africa, many gig
workers earn below the minimum wage, particularly in industries like online task-based
platforms and delivery services.
Example: A 2020 study by the University of Cape Town (UCT) found that many
domestic workers on online platforms like Uber, Bolt, etc earn below the minimum wage
(Van Belle, 2020).

 Algorithmic Management: Commonly used by platforms, distributes work through

algorithms which sometimes sets unrealistic expectations or penalises employees for
minor infractions. For instance, Takealot delivery drivers have faced unjust deactivation
by algorithms triggered by factors like adverse weather or traffic delays (Duggan et al.,
2019).

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  Uncertain Working Conditions: Gig workers, particularly in delivery services, endure
uncertain working conditions, lacking basic rights such as safe environments and
reasonable hours. They often endure long shifts, minimal breaks, and safety hazards,
especially in logistics and transportation. These workers are typically denied social
protection and labour safeguards (Zhang et al., 2023).

Bargaining Power
 Customised Work: Gig working tends to isolate employees, making it difficult to
organise unions or engage in collective bargaining for better pay and working conditions
(Hardy and McCrystal, 2022).

 Platform Dependency: Gig workers often use platforms to find jobs. The employers on
these platforms know that most gig workers are desperate for employment, especially
those that have a low-level skill to offer. This allows these employers to exploit these
workers on the basis of their desperation for employment (Hardy and McCrystal, 2022).

 High Competition: Most people who take these kinds of jobs tend to suffer from the high
competition in the labour market. Hence, workers do not feel comfortable in bargaining
for higher pay as they can be easily replaced (Healy, Nicholson and Pekarek, 2017).

Health and Safety Concerns

 Difficulties: Within the gig economy, domestic workers, who are also gig workers, face
safety difficulties. They frequently must cope with unpleasant chores that clients demand
them to complete. This can cause physical strain and health problems (Allen, 2024). An
example of the negative effects of challenging work on one's health is provided by the
case study of Grace, a domestic worker in Cape Town. Grace's everyday responsibilities
included tasks like mopping floors on her knees, which over time led to serious joint
issues (Allen, 2024).

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  High crime rates: South Africa notoriously has the third highest crime rate globally
(Statssa, 2023). This significantly impacts the safety of gig economy workers, who often
risk their physical safety to earn a living wage, thereby affecting their livelihood
sustainability. Workers in the gig economy, especially those in the food delivery and
ride-hailing industries, are at a significant risk of being victims of violent crimes
including carjackings and robberies. Their mental health and sense of security are
negatively impacted by this ongoing threat, which also endangers their physical health
(Allen, 2024). These gig workers are also facing safety concerns due to ongoing
confrontations between taxi companies and e-hailing drivers (Tshabalala, 2023). Taxi
operators accuse e-hailing drivers of stealing passengers, leading to violent incidents. An
example of this is the shooting at Maponya Mall in Soweto where e-hailing drivers were
attacked, leaving one of them shot dead over the confrontation (Tshabalala, 2023).

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 Addressing Exploitation in the South African Gig Economy

South Africa's gig economy thrives in a legal grey area, leaving gig workers vulnerable. The
government must act to protect them through legislative reform and social security measures,
while fostering worker collaboration for a fair future.

Reworking Labour Law

Currently, under South African labour law, gig workers are classified as independent contractors.
In that regard they are ineligible for basic labour rights. These include collective bargaining,
freedom of association and protection against unfair dismissal and discrimination (Allen, 2024).
The government can create new categories in the existing legislature that will afford gig workers
the same protections as traditional workers. This should be done following already existing
international legal frameworks and should be based upon the principles of fair platform work
(Van Belle, 2020).

Fair Pay: Minimum wage should be guaranteed, pay structures and rates of wages should be
open and fully exposed to manipulation by algorithms.
Fair Conditions: Working hours, breaks and occupational health, safety regulations must be put
into place.
Fair Contracts: Contracts should be clear, concise, and translated into the worker's language.
Fair Management: Platforms should have clear grievance procedures for workers, ensuring fair
and transparent dispute resolution mechanisms.
Fair Representation: The right to form unions or worker associations should be legally
recognized and supported.

Enforcement Mechanisms
Due to the nature of the interaction between employees and employers in the gig economy, it is
often difficult to effectively monitor the compliance with any labour laws that may be
implemented i.e. minimum wage, health and safety standards (Pole, 2023). This is because the

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interaction happens almost exclusively through the digital platform in which the employee and
employer meet. In this regard, the Department of Labour could consider the following:

 Increase the number and training of labour inspectors to effectively monitor digital
platforms.

 Develop new technologies for remote inspections and data collection from platforms.

 Collaborate with digital platforms to create transparent data-sharing channels for

inspection purposes.

Social Security
The flexibility of the contracts that gig workers are bound create the situation where protections
for employees are not afforded. The most prevalent example of this is the lack of social security
benefits afforded to gig workers. Without these, any worker is left financially vulnerable (Pole,
2023). Therefore, apt benefits that better suit the type of work that gig workers do should be
devised:

 Portable pension schemes: These schemes would allow workers' contributions to follow
them across different platforms and gig jobs, ensuring a secure retirement.

 Income support programs: Government-funded programs could provide temporary

financial assistance to gig workers during periods of low income or unemployment.

 Health insurance plans: Platforms or a combination of platforms, workers, and

government contributions could fund health insurance plans, offering gig workers crucial
healthcare access.

Worker Collaboration
As such in the traditional labour economy, there should be gig worker unions created to promote
and safeguard the rights and interests of its members (Johnston and Land-Kazlauskas, 2019). As
a result, gig workers would gain the following key advantages:

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  Collective Bargaining Strength: Collective bargaining allows unions to negotiate for
better pay, benefits, and working conditions on behalf of all members.

 Lobbying Power and Advocacy: Unions can lobby governments to enact legislation that
protects gig workers.

 Legal Support and Dispute Resolution: Unions can provide legal support and
representation in cases of unfair treatment, algorithmic bias, or contract disputes.

 Improved Working Conditions: Unions can push for better safety standards, fairer
workload distribution, and clearer communication channels between platforms and
workers.

 Solidarity and Worker Empowerment: Unions create a sense of solidarity and

community among workers, allowing them to share experiences, strategize collectively,
and support each other in their fight for fair treatment.

There are cases where gig worker unions have been successfully formed and operate in the
interest of their members. The Independent Drivers Guild (IDG) is a prime example in the
United States. The IDG has successfully negotiated improved working conditions and pay
structures for ride-hailing app drivers (IDG, n.d.). Similarly, in India, the All-India Gig Workers
Union (AIGWU) and the Indian Federation of App-based Transport Workers (IFATW) are
advocating for the rights of gig workers in the transportation and delivery sectors. These unions
are crucial in a country with a rapidly growing gig economy.

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 Conclusion
When e-commerce and gig work coincide, the results are both opportunities and challenges. Gig
work allows workers flexibility, independence, and the chance to earn income through
completing different tasks or jobs. Businesses embrace gig work and the gig economy as it
allows them to outsource fixed-term workers on demand, which can save them a lot of money.
However, there are concerns surrounding the equal distribution of power within the employment
relationship. This is evident through the common themes of low wages, unregulated working
conditions, limited bargaining power, and a lack of worker protection - to mention a few.

The advantages and disadvantages mentioned throughout this report create a complex landscape
for businesses and workers to navigate. In order to address concerns and allow real and fair
opportunity in the future, a multifaceted approach is needed.

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