Gig workers endure financial pressure, lifestyle changes

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 30 Jul 2020

Approximately 80% of e-hailing drivers and delivery services employees in SA now earn less than R4 000 per month, compared to 16% before the introduction of the COVID-19-induced lockdown in March.

This is according to the South African edition of “The Digital Hustle: Gig Worker Financial Lives Under Pressure” report, with research conducted by global venture capital firm Flourish, in partnership with research firm 60 Decibels and gig worker start-ups FlexClub and Picup.

The report tracks the experiences of local workers of e-hailing and delivery apps, to learn more about how they are impacted by the COVID-19 pandemic from various aspects, including their ability to earn an income, coping strategies and quality of life.

Surveying more than 600 South African e-hailing and delivery apps gig workers, Flourish found 76% experienced a large decrease in income since March, with approximately four out of five workers saying they now earn less than R4 000 per month.

It found that some gig workers are impacted more than others – e-hailing drivers were twice as likely as delivery workers to report a significant decline in quality of life, with 83% suffering a large decrease in income.

The majority (91%) of surveyed respondents are concerned about the ability to earn an income, find work and cover day-to-day work expenses. For four out of five people, health risks associated with returning to work was not a top concern.

“Digital platforms have made it possible for workers around the world to participate in the gig economy, providing a degree of formality and stability to their work,” says Arjuna Costa, managing partner at Flourish.

“When the COVID-19 outbreak caused the global economy to come to a halt in the first quarter of 2020, workers were severely impacted. Some gig workers have a financial cushion, but a majority live on the edge. If they lost their main source of income, 58% of respondents reported they would not cover household expenses for a month without borrowing money.”

As part of the survey questionnaire, gig workers were asked to describe how they are faring in the current conditions. A delivery driver said: “People are not buying as they used to do, and the number of deliveries has dramatically dropped.” An e-hailing driver was quoted as saying: “We are eating two meals a day. That is what we can afford now.”

Local e-hailing drivers have always complained and protested about low wages and high commission rates, and the COVID-19 crisis has only worsened their situation.

In April, ITWeb spoke to aggrieved Uber and Bolt drivers and operators who had lobbied government to allow them to be included in the COVID-19 Relief Fund, fearing their vehicles will be repossessed, as their business takes a huge blow during the lockdown period.

A survey conducted by The Fairwork Project in April revealed that gig workers in SA have been among those particularly hard hit by the COVID-19 pandemic and accompanying economic crisis. It found the majority of SA’s gig workers lost their jobs entirely during lockdown, while those able to work have on average lost four-fifths of their income.

In May, digital economy firms Uber, Airbnb and Lyft confirmed they have been forced to cut thousands of jobs as they reconcile with the economic bloodbath caused by COVID-19.

Financial analysts have forecast a looming global recession, with governments and policy-makers cutting interest rates to stabilise economies suffering from the impact of lockdowns.

According to Flourish, over half of gig workers have already reduced their household expenses, almost half borrowed money, and nearly three out of four had to rely on savings. Yet, only one in five are seeking additional income – a low figure possibly driven by the strictly-enforced COVID-19 lockdown, it notes.

“Despite recent hardships, we expect continued growth in online platforms and financial tools to support gig workers. In the next six months, nearly all respondents plan to restart or continue the work they were doing before the lockdown.”