Holding platform companies accountable is the need of the hour in the Covid-19 pandemic.

Caitlin Bentley


Over the last decade, tourism platforms have started to dominate Indonesia's tourism industry. Small business owners and individual workers now find themselves almost completely dependent on these platforms.

While this dependence has proved to be both a blessing and a curse, both business owners and laborers find themselves left in the lurch as the Covid crisis brings the industry to a complete standstill.

After creating entrenched inter-dependencies, tourism platforms now seem to have washed their hands off the situation, leaving small businesses and laborers on their platforms to navigate these disruptions on their own.

By now we’ve all become familiar with arguments in favor of digital platforms. Since the mid 2000s, these platforms have produced networked efficiencies through the creation of inter-dependencies between platform owners and users—like tourism service providers and customers. In other words, the two constituencies have become reliant on each other. The more these actors depend on one another, the greater is the platform’s economy of scale. This also allows businesses and laborers to find a reliable method to offer their services and enter into transactions with the platform’s users (often in return for a fee payable to the platform).

In 2018, our research mapped all accommodation providers in Yogyakarta in Indonesia and found that 98.6 percent of these businesses were listed on platforms such as TripAdvisor.com, Traveloka.com, Booking.com, Tiket.com, Hotels.com, Expedia.co.id, Agoda.com, Misteraladin.com, and Pegi-pegi.com. Even though these varied in popularity, Tripadvisor and Traveloka being the most popular, almost all accommodation providers were completely dependent on one travel platform or another. For small business owners in Bali, Lombok, and Yogyakarta, dependence on platforms was both a blessing and a curse. In general, there were many positive examples of drivers, massage parlors, and restaurant owners who gained prominent positions within platform listings, thereby benefiting considerably. In contrast, many homestay owners who used to be able to rent out their accommodations to walk-ins, now found themselves forfeiting part of their income to platforms. Newer small businesses found it difficult to compete with established and larger companies and services because of the way platforms algorithmically rank businesses.

Across the board, Indonesian tourism is heavily mediated by digital platforms. In the past, the industry was dominated by tour operators and travel agencies, supported by travel associations and unions like the Association of the Indonesian Tours and Travel Agencies (ASITA). Now, the role and importance of such institutions have diminished as platforms like TripAdvisor.com and Booking.com have paved the way for tourists to find their own way within the country.

Signs of the downturn are everywhere. Hotels are closing, beaches are empty, and very few restaurants are able to remain open, or even provide take-away and delivery services. The tourism sector, the country’s fourth largest, is all but gone.

Fast forward to May 2020, and we are in the thick of disruptions wrought by the Covid-19 pandemic. Around 200 countries and territories have imposed travel restrictions, and many have implemented lockdowns and social distancing measures in an attempt to control the spread of the virus. Media reports suggest that international flights are down 95 percent compared to the same time last year, and more than 7,000 tour guides in Bali are out of a job. The Indonesia Travel Agent Association posted a record loss of 4 trillion IDR (more than 250 billion USD) in February and expects to suffer an equivalent loss in March. Economists predict that recovery for the tourism sector will take more than a year.

For now, signs of the downturn are everywhere. Hotels are closing, beaches are empty, and very few restaurants are able to remain open, or even provide take-away and delivery services. The tourism sector, the country’s fourth largest, is all but gone.

Bali, one of the world’s most popular tourism destinations, has seen very few cases of the coronavirus. But that has not cushioned Balinese, as well as other tourism dependent provinces, against a harrowing situation. Prior to the crisis, many business owners we interviewed in these provinces had taken out small loans to purchase tourism vehicles and rent shop-fronts. It was common for men and women to have spouses working in hotels as managers or hospitality workers. This gave small business owners some security in a fluctuating and seasonal tourism market. Now, business owners and their spouses are out of work. Skilled tourism workers employed on cruise ships in Indonesia and abroad, are also returning home, creating a spiral of the unemployed competing for virtually no alternative jobs.

Where are the platform companies now? Why is it acceptable to create such dependencies that flow only in one direction—from laborers and small business owners to platform companies? Why have laborers and small businesses, who were critical to the success of these platforms over the last decade, suddenly been dispensed with?

Where are the platform companies now? Why is it acceptable to create such dependencies that flow only in one direction—from laborers and small business owners to platform companies?

The impact of the Covid-19 crisis on the global labor market can be understood as a 'networked desolation'—a ripple-effect of sorts in which shocks in one part of an inter-dependent network resulting in tremendous and negative disruptive consequences across the network. So much time and effort is dedicated to researching and highlighting the positive impacts of networked interactions, that it is easy to forget that inter-dependencies are susceptible to both positive and negative feedback loops. And forestalling the negative feedback loops demands credible solutions that guard gig economy workers and businesses from remaining beholden to platforms.

In one respect, recent policy initiatives of the Indonesian government might be able to teach us a thing or two in the midst of this crisis, especially about how to design social safety nets for gig economy workers, and to account for the needs of small business owners. In 2014, the Indonesian government launched a universal social security system (BPJS) that allowed both formal and informal workers to access healthcare and other types of employment insurance. In the wake of the Covid-19 crisis, Indonesian banks and co-operative lending schemes have offered loan relief to those affected.

But even as programs instituted by the Indonesian government are critical, so too are collective measures to ensure that the rights of laborers are protected. There is little hope of the tourism sector recovering any time soon, but in the meanwhile, we need to turn our attention to rights and labor standards in the platform economy.

The International Labor Organization abides by four core principles, of which the first is freedom of association and the right to collective bargaining. It is time we leverage this principle to demand minimum levels of protection for marginalized platform workers, hold platform companies accountable, and ensure that they provide benefits to workers in good times, and act responsibly during the bad.

Two key standards that should be adopted urgently are: 1) provide support to gig economy workers to unionize—a platform union of sorts; and 2) implement data sharing standards for countries and companies to track the level of investments that gig economy workers make in platforms. For example, small businesses that have been logging on and using a platform for years should have relatively greater rights to claim restitution than others that use the platform sporadically. One might also take into account how a business could have a compounded stake across multiple platforms as well. Platform companies typically have ratings and data that help them track the history of a worker (or a small business). These will indicate the level and extent to which a worker has invested in the platform company, and should be used as a measure to determine entitlements in proportion to their level of investment.

 

 


This article is part of our Labor in the Digital Economy series.