Benefits of platform work need to be assessed with caution

The COVID-19 pandemic is accelerating the rise of digital labour platforms. In the last decade alone, numbers have expanded five-fold worldwide.

Against this background, FES Vietnam, together with its research partners, recently conducted a study assessing the situation of gig workers in Vietnam, specifically looking into the case of ride-hailing drivers. Today, we speak with Dr Do Hai Ha, head of the research group, for more insights into benefits and costs of platform work, and the need for relevant legal frameworks.

What are the benefits and costs of platform work for workers in Vietnam?

I am of the view that the benefits of platform work for workers need to be assessed with caution. In Vietnam, the perceived benefits of platform work are generally speculative rather than evidence-based. In a recent study of ride-hailing motorbike drivers in Hồ Chí Minh City (HCMC), my colleagues and I have found that the autonomy and flexibility of drivers was indeed substantially restricted owing to their economic dependency on platform work and the algorithmic and traditional controls exerted by platform companies. Furthermore, the incomes of ride-hailing motorbike drivers are not as high as presumed by the dominant discourse. Our survey reveals that the average income of full-time drivers (those working at least 48 hours or more every week) in HCMC was 9,290,344 Vietnamese Dong (VND) per month (approximately 409 USD/month). This is, in fact, a low income because, according to the calculation of the Global Living Wage Coalition, the monthly living wage for HCMC in 2020 is 7,446,294 VND (328 USD), excluding overtime pay and productivity bonuses. Meanwhile, to receive the above-mentioned income, the surveyed workers had to work on average 11 hours per day and 28 days per month – equivalent to 100 hours overtime every month on top of the regular 48-hour working week. This goes well beyond the 40-hour monthly limit on overtime under the Vietnamese Labour Code – not to mention its overtime cap of 300 hours per year. In addition, unlike conventional employees, ride-hailing motorbike drivers are not entitled to any kind of paid leave and social security benefits.

Moreover, our research reveals a high degree of precariousness and vulnerability of app-based motorbike drivers in HCMC. Their incomes are not only low, but also highly vulnerable due to frequent adjustments of service fees, deduction rates and bonus formulas by platform economies and changing market conditions, including the impact of the COVID-19 pandemic. Normally, ride-hailing drivers have to work for excessively long working hours, and are exposed to high occupational health and safety risks with limited support from their companies. They also face low job security, poor social protection and frequent managerial abuses. Last but not least, app-based motorbike drivers have a very limited voice in determining their work pay and conditions, a consequence of the lack of an effective representative organization for workers and genuine mechanisms for workplace dialogue and bargaining.

To what extent are the precarious and vulnerable conditions of ride-hailing motorbike drivers related to Vietnam’s legal framework?

It should be noted that the recent years have witnessed an emergent debate in Vietnam as to whether ride-hailing (car and motorbike) drivers are considered ‘employees’ and, therefore, fall within the coverage of labour and social security laws. Although this question was initially posed by legal and labour experts, ride-hailing workers have begun to, explicitly and implicitly, demand legal rights provided for employees. Nevertheless, the legal status of ride-hailing workers remains ambiguous under Vietnamese law.

The unclear legal status of ride-hailing workers is closely related to their precariousness and vulnerability. It has effectively excluded them from the protection of labour and social security laws. This has enabled platform companies to retain a broad discretion in determining work pay and conditions, disciplining and terminating ride-hailing drivers while saddling economic and occupational risks on their shoulders through carefully crafted agreements that the drivers can only ‘take or leave.’ Moreover, ride-hailing workers have been deprived of basic labour rights, like the right to reasonable limitation of working hours; right to paid leave; and right to safe and healthy working conditions. Their right to social security is also effectively restricted, especially in relation to sickness, maternity, work-related accidents and occupational diseases, rendering their situation more precarious and vulnerable. In addition, our interviews with app-based motorbike drivers in HCMC indicate that the unclear legal status has discouraged several drivers from seeking remedies for their perceived injustice. Simultaneously, it has rendered labour authorities and unions reluctant to engage in and support collective protests by ride-hailing workers, unlike in the case of wildcat strikes organized by factory workers.

What are some of your policy recommendations to better protect the rights of workers in the platform economy?

Vietnamese regulators should reconsider existing legal criteria to distinguish between employment and self-employment. For this sake, they may consult Recommendation No. 198 of the ILO, especially in relation to two points. One is the emphasis on relying on the facts relating to “the performance of work and the remuneration of the worker” rather than the contractual characterization of the relationship to determine the existence of an employment relationship. The other is the use of a non-exhaustive list of possible indicators rather than concentrating mainly on the indicia of ‘management, direction and supervision’.

Another possible solution is enacting specific regulations to protect ride-hailing, or more broadly platform workers. Whether such workers should be granted all or some protections available to traditional employees requires careful consideration. Despite this, such regulations should provide for at least minimum standards on remuneration, working time, paid leave, occupational health and safety and basic social security entitlements. Particularly, platform workers should have the right to organize, the right to collective bargaining and the right to strike.