Thailand: On the platforms

• Mar 15, 2021

Work is no longer something that takes place only in brick-and-mortar stores, high-rise office buildings or factories, but also in virtual space, thanks to the rise of fast and always-on information technology.

Digitisation has created new and diverse markets, with more and more workers involved in a new labour ecosystem that has the potential to reshape the global economy.

At the same time, the rise of platform-powered work is bringing louder calls for fairer treatment of the people who keep this new economy humming.

For Boonrak Kamrach, a delivery application has been his only source of income for almost a year now. His decade-long career as an executive chauffeur was terminated last year when a Japanese parts company shut down in April due to the Covid-19 pandemic.

Since the end of last May, the 55-year-old has been busy delivering food and drinks. His shift starts at 8 every morning to deliver McDonald’s bites and Starbucks sips, and ends at 11 o’clock at night.

Despite the long working hours, his commitment to the new job, fed by his passion for driving, eventually paid off. Mr Boonrak is now in the Champion tier, the highest-ranking for delivery partners, which requires a minimum of 95 trips per week and 400 per month.

“The faster you can finish the job, the more work will come,” says Mr Boonrak, who completes 17-20 trips per day and up to 150 trips in a week.

Upgrading their ranking is the goal of most drivers. “The higher the rank, the more benefits the drivers will get,” he says. Higher-tier drivers get more work and qualify for more benefits such as low-interest loans and instalments.

As someone who has relied on a packaging delivery platform for his livelihood for three years, Naboon Nakmaroeng observes that “it has felt significantly different working pre, during and post-Covid-19”.

In February and March last year, just before the curfew was imposed, some workers made as much as 50,000 baht in 15 days.

“I barely made it through the curfew,” he tells Asia Focus, adding that he made 300 baht a day, while contracts for some of his fellow drivers’ motorcycles were ended because they were unable to keep up with instalment payments.

Although curfews are now history, the amount of work available is still not as high as it was before Covid-19.

In Mr Naboon’s view, the process of accepting work is unfair. Although algorithms used by the online platforms provide jobs to nearby workers at once, those with better phones and higher-speed connections tend to receive the job first as they can refresh their screens more quickly.

“Your hands have to be fast. Your eyes have to be sharp and your phone has to respond very quickly,” he says.

Therefore, some workers have modified their phones to install a program that automatically accepts jobs.

The rating has no impact on job distribution, but being a “favourite driver” does, says Mr Naboon. A client’s favourite driver will see the task 20 seconds earlier than others.

Mr Boonrak and Mr Naboon have no social security as they are not directly employed by the platform company. But both agree that the company should provide this basic coverage to people like them.

While Mr Boonrak and Mr Naboon are zipping around the city, Anupong Samala is in his office — his bedroom to be exact, where all he needs is a laptop.

The versatile 25-year-old has been a freelancer for almost five years, doing part-time jobs as an acting teacher, content writer and translator. His translation work is mediated through a website that specialises in the field.

Clients post work on the website, and translators make a pitch, with price a big factor determining who will be chosen to do the job. Ratings and testimonials also play an important part in choosing translators. The platform makes money by collecting a portion of the translator’s earnings.

However, Mr Anupong says “the fee is too high, accounting for 30% of the pitched price”, and there is no minimum pitched price, which results in underbidding and price wars that leave everyone poorer.

PLATFORM TYPES

Digital labour platforms have grown exponentially in the past decade, jumping from just 142 in 2010 to 777 in 2020, according to data from an International Labour Organization (ILO) report entitled “World Employment Social Outlook 2021: The role of digital labour platforms in transforming the world of work”.

The report categorises platforms that mediate work into two types: online web-based and location-based. For online web-based platforms, tasks or assignments are undertaken remotely or online by workers.

Among the web-based platforms, freelance and contest-based, competitive programming and microtask platforms are gaining popularity.

Tasks on freelance platforms can range from translation and copywriting to financial and legal services, design, and data analytics. Platforms will match clients and workers based on ratings and reviews and facilitate client-worker relationships through messaging functions, for example.

A worker with multiple skills can access various tasks on the same freelance platforms; in the meantime, clients can obtain access to a wide range of skilled labour in a single place.

Contest-based platforms and competitive programming platforms use the same process to find workers. The workers have to compete with each other, and with similar services offered, outstanding workers with a reasonable pricing strategy will be picked by the clients.

Microtask platforms primarily focus on short-duration tasks such as transcribing short videos, checking data entries, or adding keywords to classify products for AI and machine learning. It can be as simple as visiting websites to increase traffic, or screening sensitive content.

More companies are using online web-based platforms for three reasons: to streamline the recruitment process, to reduce costs and improve efficiency, and to access knowledge and seek innovation.

On the other hand, location-based platforms require workers to be physically be on site. Besides taxi and delivery services that have grown rapidly, other location-based services can range from home services such as a plumbers or electricians, to domestic work (housemaids) and care provision (massage).

Taxi platforms such as Uber, Grab, Gojek, LINE Man and Bolt facilitate ride-hailing by connecting nearby drivers with customers seeking a ride. Delivery platforms facilitate transactions between customers, workers and business partners such as restaurants, supermarkets, pharmacies and retail stores.

Customers are updated in real-time on their driver’s location, approximate waiting time, estimated fare, and ride duration.

One major delivery trend, accelerated by Covid-19, is the ghost kitchen or cloud kitchen. With stay-at-home policies imposed, delivery meals were in high demand, prompting both eager home cooks and restaurants alike to offer delivery-only services.

HOW IT WORKS

The way the digital economy operates is fundamentally different from traditional business. Platform business have distinctive features that enable firms to create a market base, build networks and expand rapidly.

Platforms are asset-light. Cloud infrastructure makes the business more agile and allows it to focus on core services as the firm can reduce the costs of warehouses, capital assets and employees.

To be a successful platform, it has to attract a sufficient number of users from both sides — clients and workers — to create a network effect, in which the value of goods and services depends on numbers of users.

Enhancing network effects will attract even more users and expand opportunities for growth. Adopting pricing (and non-pricing) strategies such as free access, rewards, discount promotions, and other potential benefits will encourage people to join the platforms.

Fees contribute significantly to platforms’ revenue. On location-based platforms, customers pay a commission fee — up to 30% of the value of a food order for example — whereas on a web-based platform, such fees tend to be higher and the workers who accept jobs through them are the ones who pay.

In 2019, the US-based freelance platform Upwork earned 62% of its US$300 million in revenue from various fees paid by workers, compared to 38% from clients.

But data is the real fuel that powers platforms. Collecting data is essential to their business. Not only can data be monetised through targeted advertising, but it can also predict behaviour, improve products and services, and manage workers via algorithms.

Algorithms are integral to platforms as they help match workers with clients. Ratings, customer reviews, workers’ profiles and skills, cancellation or acceptance of work are key elements of algorithmic matching.

Algorithms also monitor, track and evaluate workers and organise work processes.

For web-based platforms, the matching process might take a worker’s subscription plans and optional purchased packages into consideration as well. The practice could exclude some workers from accessing tasks, particularly those that offer lower income.

The ILO report found that a considerable number of workers surveyed in app-based taxi and delivery sectors were unable to refuse or cancel work because of the negative impact on their ratings, which could lead to reduced access to work, lost bonuses, financial penalties, or even account deactivation.

Platform businesses are largely financed by venture capital funds at first. The funds allow platforms to expand quickly and operate at a loss for long periods. Taxi service platforms have received a larger share of funds than delivery or online web-based platforms.

Key stakeholders including workers, clients and business partners have to accept a platform’s terms of service agreements to participate in the system. The agreements tend to be unilaterally determined by the companies and cover aspects of acceptance or rejection of work, deactivation of accounts, and data usage.

This form of governance allows platforms to control workers’ freedom to work and can shape clients’ and partners’ ability to engage with workers.

TIME FOR REFORM

Calls are growing for a fairer system as digital platforms become more essential to daily life. This will require all parties involved, from workers and company representatives to the relevant public agencies, to participate in social dialogue to ensure fair competition and decent work opportunities, as well as an enabling environment for sustainable enterprises.

Unilateral service agreements represent the biggest regulatory challenge when it comes to improving engagement between workers and platforms.

“The companies define platform workers as ‘partners’ or internationally as ‘independent contractors’ to avoid legal employment relationships between platforms and workers,” says Suphalak Bumroongkit, an academic and specialist representing the Move Forward Party in the committee on labour of the House of Representatives.

When an employment relationship is denied, companies can dodge all the responsibilities and reject the protections of labour law, he notes.

Facing uncertain incomes, along with algorithms designed to pressure them to constantly accept tasks, workers, particularly location-based ones, have to complete for jobs as fast as they can. Excessive speed could result in accidents and even the loss of lives.

Classifying “partners” as “employees” will ensure improved workers’ rights, labour and social protections. In the United Kingdom, the Supreme Court ruled last month that Uber drivers are not self-employed, while a Spanish court ruled last Thursday that app-enabled delivery riders are employees and not contractors.

In Thailand, delivery drivers recently staged a demonstration calling for fair and equal payments, a fair termination process as well as adequate call centre support.

In Mr Suphalak’s view, food delivery drivers’ predominant role in the movement has resulted in a lack of understanding in society about other platform labour, such as car drivers and domestic workers who experience problems as well.

“In Thailand, amending the existing legal framework is too complicated and could be time-consuming,” he says.

“The government should provide a Universal Basic Income to all citizens as a guarantee for living under uncertain circumstances,” he adds, citing the findings from a research project on developing a legal regime to reduce the inequality facing freelancers affected by the challenges in 21st century.

In the longer term, he believes, the government should promote and engage collective bargaining for digital platform workers. However, the Labour Relations Act of Thailand offers little recourse to digital workers as they are not considered employees working in the same enterprises or sectors.

“This excludes informal labour from establishing and participating in trade unions, resulting in poor protection of labour rights,” Mr Suphalak notes, adding that this was a factor in a US decision last year to reduce many of Thailand’s duty-free trade privileges.

Customers can take a stand as well by calling on the platforms to have a business code of conduct and by supporting platforms that offer better treatment to the people who help them prosper, he adds.

Source: https://www.bangkokpost.com/business/2083671/on-the-platforms