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Online contract jobs are now helping millions in the developing world to make a living – but a study has uncovered a subculture of low pay, job insecurity and lack of redress against exploitation.

The “Gig Economy” works via online platforms where small jobs are put out to global tender. Sometimes these are locally delivered activities such as housework, but more common are globally delivered products such as writing or social media work.

Anyone can bid for the job, which is why it has been welcomed by organisations such as the World Bank and the UN Development Programme as a boost to human development and a solution for the tens of millions of people entering the global job market each year.

Now a study of online workers in the developing world has found there are far more people seeking work than there are jobs available, which drives pay downwards. The study, published in January, was presented at the Digital Development Summit this week (13 March).

An analysis of transaction data from one of the world’s largest online platforms found that, in the Philippines, 220,000 people were offering their services but only 33,000 had ever received any work. Oversupply of labour was also a problem in Kenya, with 20,000 registrants never having worked; and to a smaller extent in Malaysia, Vietnam, Nigeria and South Africa.

The researchers, from the Oxford Internet Institute in the UK and the University of Pretoria in South Africa, surveyed nearly 500 online workers and found that the average amount of time each one said they spent browsing and bidding for jobs was 18 hours a week. Almost half (43 per cent) felt easily replaceable, since contracts can be ended at any moment.

Many felt isolated, with three-quarters saying they rarely or never communicated face-to-face with other workers. Follow-up interviews with 125 workers uncovered feelings of isolation, lead author Mark Graham told the Summit.

Isolation was compounded by workers knowing little about their clients, with ten per cent not even knowing their names. Some 70 per cent would like to know more about their employers.

“It’s basically like the dock-workers: they wait and wait for work to arrive. But if you are in India you have to work at night to get the jobs posted by America.”

Valerio De Stefano, Bocconi University

Overwork was common, with one in five saying they experienced pain as a result of their work. Interviews uncovered people working long hours – some over 70 hours a week – and through the night.

But over two-thirds of respondents said that “gig” earnings were important to their household income. And over half said their work involved complex tasks – a sign of stimulating work. Some said they preferred it to working in a business outsourcing setting, such as a call centre.

Graham told the meeting that “platforms give little back in the way of taxes but make use of a nation’s resources”. He called for more thought to be given to regulation, market-based solutions modelled on fair trade organisations and new ways of approaching labour rights.

Valerio De Stefano, of Bocconi University in Milan, Italy, said that online platforms suffer from all the well-known problems associated with other forms of casual labour.

“It’s basically like the dock-workers: they wait and wait for work to arrive. But if you are in India you have to work at night to get the jobs posted by America.” He said that while there were attempts in the developed world to bring gig workers together into unions it was harder to see how these could reach out to workers in the developing world.

The most promising area for intervention would be with the platforms themselves, which have detailed data on every worker. They could take on responsibility for collecting taxes and social security, for example, and pre-screen potential workers to limit numbers and thus reduce fruitless time spent searching for work.