hankyoreh

A rider with the delivery platform Grab waist for a light on a street in Singapore’s financial district in 2020. (EPA/Yonhap)

While people in East Asia today have been ratcheting up tensions across national borders, corporations have been crossing those same borders in search of lower personnel costs and broader markets. Platform businesses have been no exception.

Mobile apps bill themselves as offering convenience. But at root, their success hinges on how quickly they are able to conquer markets and exploit cheap labor.

Outside of China, East Asia’s markets are divided between two companies: Delivery Hero and Grab.

Delivery Hero, which owns Foodpanda and Baedal Minjok, is a dominant global food delivery platform in Europe and South America. In terms of Asian markets, it is competing fiercely in Taiwan, Hong Kong, Malaysia and the Philippines through its Foodpanda brand.

Meanwhile, Grab has a firm grip on the market in more or less every other Southeast Asian country.

Grab was formed in Malaysia in 2012 by a group of 40 taxi drivers. Over the years since then, it has expanded into nearby countries.

Today, it has its headquarters in Singapore, dominating the mobility markets in around 400 cities in eight Southeast Asian countries. Though it started out as a rideshare matching app, it operates over a wide range of areas today, including food delivery, rapid dispatch services, and financial services.

In its early stages, the success of Grab’s business model owed itself to its competition with US-based Uber. Much like Didi Chuxing in China, it enjoyed a complete victory over Uber, which failed in its localization bid.

Capital markets saw further potential for growth in the Southeast Asian consumer market and digitalization. This led in turn to Grab’s listing on NASDAQ in December 2021.

At the time of its listing, its value amounted to US$40 billion — the largest amount in history for a Southeast Asian company. To be sure, its stock values have fallen since then: In a similar trajectory to Coupang, they’ve declined to about a third of the initial peak figure. For major shareholders like SoftBank Chairperson Son Jeong-ui (Japanese name Masayoshi Son), this must have been a jackpot.

Grab’s dominance in the Southeast Asian market has been devastating to the livelihoods of countless workers in different countries who earned their living on motorbikes.

In Southeast Asia’s traditional motorbike transportation market, workers had been able to earn piecemeal profits through haggling with customers. Grab’s arrival ensured that this was no longer possible. This is also the reason that workers who earned a living on cyclos in Indonesia and Vietnam in the late 2010s have been holding massive demonstrations for days on end against Grab and their respective governments.

Grab employees have not been happy either.

As recently as 2021, Grab was massively in the red, to the tune of US$3.6 billion. To overcome this crisis, the company drastically slashed the commissions it had been paying to its workers. This did have the effect of cutting enormous costs, while wages were substantially reduced.

A survey of 290 drivers by the Gadjah Mada University Institute of Governance and Public Affairs in Indonesia found that their incomes had fallen to roughly a third in the year since February 2020.

An additional survey conducted by Indonesian platform labor researcher Arif Novianto showed that average daily earnings had fallen from 460,000 rupiah in 2018 to 85,000 rupiah as of April 2020 (US$30.35 to $5.61). While that number did recover somewhat in 2022, there has been a definite drop in wages for Grab workers since the initial public offering.

As the commissions fall, they have to work constantly to make a living, and the risk of traffic accidents becomes very high. The aforementioned survey showed 73.85% of all drivers as having experienced some form of vocational health issues, including those related to accidents.

One of the factors in this collapse of labor rights is the special employment approach, which assumes no responsibility for employment.

Grab does not guarantee basic labor rights such as a minimum wage, holidays, or safety equipment for its drivers. Since burning through venture capital cash to take control of the market, Grab has not taken responsibility for anything at all. All that remains is the brutal reality of low wages and fierce competition.

The only way out is for the drivers to organize on their own. The previously mentioned study showed around 60% of respondents to be members of a labor union or similar form of worker organization. Examples of this include the Sahabat Grab Club and Serikat Ojol Indonesia (Seroja).

In the space of one year, Seroja’s membership grew from 120 in August 2020 to over 7,500. In his analysis, Novianto said that the trend of driver organization was “visible on WhatsApp and Facebook groups” and that “consciousness is rising.”

In November 2021, hundreds of drivers converged on a platform business’s offices in Surakarta to protest the company’s decision to lower the minimum delivery fee by 15%. Novianto’s survey found that there had been 71 platform worker protests in the two years since March 2020, along with large-scale demonstrations, strikes and office occupations.

A strike by Foodpanda drivers in Hong Kong in fall of 2021 also emerged out of online self-organization, while a strike by 9,000 Foodpanda drivers in Yangon the following spring showed a similar form of organization.

It is quite significant that the most energetic grassroots movements happening in these two cities — where democracy is being threatened by authoritarian rule — are being organized by platform workers. It shows how even in the most desperate moments, the seeds of hope can sprout anywhere.

In South Korea, food delivery is a flexible form of employment, and drivers’ labor rights are not guaranteed. According to findings shared on Dec. 27 from a Ministry of Land, Infrastructure and Transport survey of delivery business conditions, the number of drivers had risen all the way from 119,626 in the first half of 2019 to 237,188 in the first half of 2022.

A survey of 1,200 delivery business employees found that 43% of drivers had been involved in a traffic accident in the preceding six months. This was attributed to reckless driving due to short delivery times.

On Jan. 27, the Ministry of Employment and Labor announced an “employment service advancement plan” that included “reforming regulations to encourage employment service industries.” Like so much discourse on regulatory reforms, it contained hidden risk factors that should not be overlooked.

The plan is to define platforms like Baedal Minjok as “electronic mechanisms or systems that provide information for the signing of labor contracts or mediate labor contracts.” If platforms are viewed simply as mediators, the consequences will inevitably be passed on entirely to 230,000 delivery drivers — since this means exemptions in terms of industrial accidents, working hours, negotiations and other areas.

It's the sort of situation that should have those drivers taking their motorbikes in front of the Ministry of Employment and Labor just like their counterparts in Jakarta, Yangon and Hong Kong.

By Hong Myung-kyo, East Asia researcher and activist

Please direct questions or comments to [english@hani.co.kr]