Exploring the Platform Political Economy of Self-Help in Africa

Informal savings group in Tarime district, Tanzania. Photo: Daivi Rodima-Taylor

Self-help groups can be found in many areas of Africa—including the chama groups of Kenya, isusu of Nigeria, and stokvels of South Africa (Ardener and Burman 1995). Their customary rotating credit arrangement is also popular among African diaspora communities (Hossein 2018; Ardener 2010). A significant rise has occurred in these groups at the wake of the neoliberal restructuring reforms of the 1980s-90s, with a decline in formal sector employment and state-funded producer cooperatives. At present, these mutual support groups are targeted by FinTech platforms as well as conventional banks with various financial products and software apps. My recent research explores of the contentious interplay between the formal and informal finance in these emerging digital interfaces in Africa. It studies the intersection of FinTech with the social economies of African mutual help groups in Kenya and South Africa, situating this dynamic in longer-term colonial legacies and present-day policies of extractive financialization (Rodima-Taylor 2022).

Informal mutual support groups with their saving-credit patterns have long served as an inspiration for the development industry. The initially successful Grameen micro-finance model drew on pre-existing reciprocities and mutually negotiated liability in largely informal contexts. However, as the microfinance formula shifted from socially situated lending towards ‘fast-scaling’ and universalizing group lending in an expanding range of localities, the industry was faced with repayment crisis (see Haldar and Stiglitz 2016). The recent conceptual shift from microfinance to digital financial inclusion foregrounds mobile payments and fee-based service delivery, with payment industry also experimenting with new sources of value such as customer data (Maurer 2015). Microloans have remained an important part of the digital financial inclusion enterprise, with poorly regulated lending apps fueling over-indebtedness. As informal savings groups and mutual support associations have become central in the livelihoods in many low-income communities, I suggest that more attention is needed to the intersection between the self-help groups and FinTech initiatives in the global South.

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Race to the bottom: Competition between Indonesian food delivery platform companies for cheap gig workers

The race to pay drivers as little as possible is underway in Indonesia. In this competition, the participants are platform companies in online transportation services, such as Gojek, Grab, Shopee Food, Maxim, InDriver. Some researchers argue that competition between platform companies will create equilibrium prices, also called a race to the middle, which is considered positive.

This positive assessment of the platform’s inter-corporation competition is rooted in the neoclassical economic notion of perfect competition. In this theoretical framework, it is assumed that competition equalizes supply and demand to create a balance of goods prices, wages, and profits; the results of which will create mutual benefits. Therefore, the preconditions for such competition are emphasized as important from a policy perspective. These preconditions include strong legal systems to support the operation of the ‘free’ market and the minimization of state intervention, which is thought to distort market price signals.

However, the story of perfect competition is far removed from how competition actually plays out. Indeed, capitalism is not as harmonious as the neoclassical framework suggests. This has led to the recognition of imperfect competition within the neoclassical framework. Stiglitz, for example, sees that markets may not work perfectly because of information asymmetries. The Marxist economist Anwar Shaikh has proposed an entirely different view of competition. For him, what takes place in capitalism is not perfect competition, but real competition. In a real competition framework, there is competition between companies to cut production costs so as to enable them to lower commodity prices below those of their competitors. With lower prices compared to their competitors, their commodities tend to be chosen by consumers. This means that competition is a fight to beat rival companies, which often leads to a process of centralization: the strong get stronger and the weak get competed out of the market.

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The partnership trap in the Indonesian gig economy

In the last three months, there have been three strikes by gig workers in Indonesia. Problems related to harsh working conditions, injustice, and the decline in the welfare of gig workers became the main issues in the three strikes. The biggest strike was carried out by GoKilat couriers (delivery service from the Gojek platform company) for 3 days on 8-10 June 2021 involving nearly 1,500 couriers or almost 80% of active couriers on GoKilat. A day later, couriers from Lala Move went on strike spontaneously for three days by mass deactivating accounts on their platform application.

Prior to the two strikes above, on April 6, 2021, a strike was carried out by Shopee Express couriers for 1 day in Bandung, Indonesia, involving around 1,000 couriers. The Shopee Express courier strike was motivated by a cut in the payment they received. The new rules reduce courier revenue from 2,500 rupiah (US$0.17)/package to only 1,500 rupiah (US$0.10)/package and that is the only income earned by the couriers. In other words, they did not earn basic income equal to the minimum wage in the province where they work. Moreover, they did not have health insurance, decent working hours, overtime pay, leave /holiday rights, and severance pay. The working conditions were worse due to the fact that the vehicles (motorcycle) used are theirs and they had to pay fuel cost.

With such a wage system, to be able to earn the minimum wage in Bandung City in 2021 of 3,742,267 rupiah (US$263.16) per month for instance, couriers have to deliver 2,495 packages monthly—not including fuel and maintenance costs they have to pay. It means that they would have to deliver about 104 packages per day to the customers. If, on average, a package is delivered in 10 minutes, they need 17 hours per day, far above the decent 8 hours work day. This oppressive work system for gig workers is possible and there is no prohibition from the Indonesian government, due to the courier’s status as an independent contractor ormitra” (partner) for the platform company, instead of labor.

The precarious and uncertain working conditions stem from the misclassification of their employment status. Companies classifies them as “partners”, so that they could avoid the obligation to provide the minimum wage, health insurance, overtime pay, severance pay, 8 working hours per day, and holiday rights if they were labor, although the working relationships between the companies and their couriers represents the employer-employee relationships as there are shift work for the couriers, work control by the companies, requirements in recruitment such as contracts of employment, and the companies unilateral rules established by the companies.

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Digital Workerism: Technology, Platforms, and the Circulation of Workers’ Struggles

UberTaxiProtestChicagoBy Callum Cant, Sai Englert and Jamie Woodcock

The so-called platform economy – the distribution of, and access to work through websites and apps – continues to grab headlines and the imagination of policy makers, researchers, and journalists the world over. Much attention is given to its rapid expansion, its potential for further growth, and the large amounts of wealth generated through it.

Amongst many others, PWC (2015) published a much-quoted study, if not always critically, which projected global revenues of $335 billion in 2025. If those numbers are potentially inflated, different valuations do point to a significant financial importance. For example, in 2015 ‘17 companies operating in the platform economy were valued at over $1 billion. Of these 17, 12 were based in the US, one in India (Olacabs), one in China (Kuaidi Dache), one in Australia (Freelancer), one in New Zealand (Trademe) and one in the UK (TransferWise)’.

Alongside these macro observations, an equally large amount of ink continues to be spilt about the liberating nature of the platform for the worker (for a particularly excited account see here). The gig worker, we are told, is entering a new reality free of the constraints of oppressive 9-5 employment, far away from the controlling gaze of their manager, able to choose when to work, set their own wages, and whom to work for. A new dawn of democratised entrepreneurialism is supposedly upon us.

Yet the actual evidence is – perhaps unsurprisingly – less rosy. Across the world, platform workers are confronted with the fact that, far from liberating them (or replacing them), new technologies play a disciplining role, deepening many of the characteristics of working conditions in a neoliberal economy: ranging from insecure and precarious employment relations, to greater managerial oversight and debt control. Callum Cant has masterfully documented some of these processes in his recent book on Deliveroo riders, as Jamie Woodcock and Mark Graham have done in their critical introduction to the gig economyRead More »