Would you like to be a taxi driver? You know, using your vehicle to transport people around town and get paid? Many people would say no, preferring to work in full-time employment where career progression is possible. Today, there are thousands of educated Nigerians, including some with regular day jobs, working as on-demand drivers on platforms like Uber and Bolt. Some people have even quipped that driving for these platforms pays better than their day jobs.
Ride-hailing platforms such as Uber and Bolt are the poster child of the gig economy—a catch-all term used to describe online marketplaces that have emerged over the last decade for short-term and freelance work.
These marketplaces typically focus on niche services such as transportation, food delivery, content writing, music production, graphics design or programming. These fully digital marketplaces try to match people (the buyer) with independent workers (the seller) who can provide these services on request; meanwhile, the platform handles everything from payments to ratings for the buyer and seller. A report by Staffing Industry Analysts (SIA) estimates that the global gig was worth $4.5 trillion in 2018, with the US unsurprisingly being the largest market with 53 million gig workers and total gig spending of $1.3 trillion.
Across Africa, the gig economy platforms take different forms. For example, there are Kobo360 and Lori Systems, two companies that have each raised at least $37 million to connect people with third-party truck drivers on-demand. Lori Systems estimates that the African haulage market is worth $180 billion annually.
There’s also SweepSouth, which has raised $6 million from investors, and Eden Life, which provide on-demand home cleaning services, among many other things, in South Africa and Nigeria, respectively. But there are also other platforms for professional services like accounting, graphics design, programming, content writing, among others. Some companies, such as Toptal, recruit experienced developer talent for international companies with salary opportunities above the local market rates. Other platforms connecting skilled workers to international clients include UpWork, Paydesk and Fiverr, an $8.6 billion company listed on the New York Stock Exchange (NYSE) in 2019.
Buoyed by these platforms, the number of gig workers in Africa has increased over the last few years. For unemployed skills workers, freelancing is a crucial way to earn a living on the internet. Freelancing has become a vital side hustle with clients springing forth from developed countries and willing to pay in dollars for professionals.
However, with the outbreak of the pandemic in early 2020 and COVID-19 control measures, the global economy tumbled. The lockdowns, particularly full lockdowns, grounded mobility and forced many people to isolate themselves at home. Business temporarily shut down physical operations, and employees started working from home. But not every job can be done from home, and that’s definitely the case for many gig workers offering ride-hailing services.
Ride-hailing suffered as ride orders plummeted globally, affecting the earning power of many gig workers. For instance, in the second quarter of 2020, Uber’s gross booking volume declined by 35% compared to the previous year. Other platforms such as Kobo360 and Lori Systems worried about the impact of government lockdowns, with Kobo360 warning that 3,000 of its truck drivers in Nigeria stopped working until they got clarity on the mobility restrictions.
In African countries such as Nigeria, Egypt, South Africa and Kenya, Uber and Bolt swiftly introduced logistics services—which were classified as essential services by the government—to keep these companies and their drivers in the business. But this was not enough. And because gig workers are not employees, they are not eligible for steady salary payments, paid leave, insurance and health benefits, although this is a rapidly…