What Challenges Come with Digital Platform Employment?

Michael Gan

The growth of the digital economy has led to the rapid expansion of the platform workforce. Digital platforms give rise to a new form of employment characterized by flexible employment relationships, high degrees of worker autonomy, and low entry barriers (Guo). By the end of 2021, China had 200 million flexible employees, encompassing jobs like food delivery and ride-hailing — most are affiliated with a few monopoly firms, such as Meituan, Eleme, and Didi Chuxing (Zhou).

Many of the platform workers in China work full-time and are dependent on the platform for their livelihood (Zhou). Classified not as employees but as independent contractors (self-employed or persons providing labor services), they often face laxly enforced health and safety regulations, long working hours, and the absence of social security. They do not enjoy the legal protection given to workers in an official labor relationship with their employers — this deprives them of health insurance, unemployment insurance, or retirement savings – essential benefits that provide financial security (Zhou).

Faced by long hours and exposed to stressful working environments with poor safety measures, digital platform workers tackle a multitude of challenges. As they lack labor and social protections, they often do not have channels to address their grievances (Zhou). As Gray and Siddharth write in Ghost Work, “the optimization of algorithm has turned the workers who rely on the platform to make a living into cogs in the great machine of our latest information technology, beholden emtirely to software and artificial intelligence” (Gray and Siddharth).

The rise of algorithm-driven platforms has removed the need for the regular workplaces found in formal employment — it has given corporations the power to control platform workers while reducing operating costs. Food delivery riders are often subjected to intense pressure from these platforms, being compelled to meet delivery targets and maintain high customer ratings. Researchers suggest that this ruthless pursuit of efficiency is behind the alarming rise in delivery-related accidents that has been observed in recent years (Xu).

Simultaneously, platforms are not preoccupied with retaining individual delivery workers. Indeed, they recognize that there is great demand for digital platform jobs — delivery workers are also aware that others will simply take their place. Profit-maximizing platforms transfer risks to delivery workers who have no influence over their wages; they sever any employment relationship with couriers by outsourcing delivery to external companies. Hence, while couriers contribute to Meituan’s profits, Meituan will not reward them with an official contract. When accidents occur, platforms capitulate on responsibility by diverting them toward insurance companies. These transfers of responsibility create unclear labor relationships that make worker attempts at securing rights difficult. When work accidents occur, these are usually covered by commercial insurances paid by workers; filing these claims can be so time-consuming that they are often not used (Xu).

Thus, it is evident that digital labor platforms have introduced new challenges for the employment status of workers, their working conditions, access to social safety nets, and the consideration of their interests at the corporate level. This has provoked a response from governments. Many are exploring ways to balance the expansion of the digital economy with due protection for workers’ rights (Zhou).

In September 2024, Singapore passed the Platform Workers Bill, becoming one of the first countries in the world to extend equal legal protection to platform workers in pension, housing provident fund, occupational injury insurance, and work associations (Ministry of Manpower). Notably, this is achieved without compromising the flexibility that has made digital platforms work distinctive (Mathews). The United Kingdom has also recently ruled that Uber drivers should be classified as workers, making them eligible for minimum wage, holiday pay, and pension plans (Browne).

Legislation in other countries could serve as guides for China as it seeks to ramp up regulatory efforts. China already has employment guidelines in place that demand platform workers receive minimum wage protections, ask platforms to remove punitive features that could lead to stress, and promote participation in social insurance (S. Trishala). However, the results of my survey show that the real challenge comes with enforcement — it can be easy to establish regulations, but if platforms are not supervised in their pursuit of profit, no fundamental changes can be made. Prioritizing workers’ rights may entail concessions of the capital. In our survey, Shunfeng, which provides its workers with adequate social welfare coverage, appears to offer a sustainable model for the industry.

Referenced works

Browne, Ryan. ‘Uber Employment Rights Setback Is a “gut Punch” to Its Prospects in the UK’. CNBC, 18 Mar. 2021, https://www.cnbc.com/2021/03/18/uber-is-reclassifying-uk-drivers-as-workers-heres-what-happens-next.html.

Mathews, Mathew. “Singapore’s Platform Workers Act strikes crucial balance for future of gig economy.” Lee Kuan Yew School of Public Policy, 18 Sep. 2024. https://lkyspp.nus.edu.sg/gia/article/singapores-platform-workers-act-strikes-crucial-balance-for-future-of-gig-economy.

‘Platform Workers Act: What It Covers’. Ministry of Manpower Singapore, https://www.mom.gov.sg/employment-practices/platform-workers-act/what-it-covers.

Gray, Mary L. and Suri, Siddharth (2019) Ghost work, how to stop Silicon Valley from building a new global underclass, Houghton Mifflin Harcourt Publishing Company, New York

Guo, Jinhui. “Fifth of Chinese Workers Are in Gig Economy as Pay, Independence Prove a Draw, Study Finds.” Yicai Global, 13 Sep. 2023. https://www.yicaiglobal.com/news/one-fifth-of-chinese-are-gig-workers-as-pay-autonomy-attract-per-iesr--zhaopin.

Trishala, S. “Navigating China’s Gig Economy: Striking a Balance Between Flexibility and Worker Protection.” ORCASIA, 31 May. 2024. https://orcasia.org/article/739/navigating-chinas-gig-economy-striking-a-balance-between-flexibility-and-worker-protection

Zhou, Iren (2020) Digital labour platforms and labour protection in China, ILO Working Paper, No.11, ISBN 978-92-2-032239-0, International Labour Organization (ILO), Geneva

Xu, Zhun. October 2022, The gig economy in China, in book: The Routledge Handbook of the Gig Economy (pp. 392-400) Publisher: Routledge.