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Grab and GoTo IPOs Have One Little Problem: Angry Gig Workers

With Singapore and Indonesia's superapps finally in reach of U.S. listings, union trouble brews at home.

Grab driver loading a cardboard box onto their bike.
, Muhammad Fadli for Rest of World

Late Monday morning in Jakarta, a group of five drivers was sitting on a piece of orange tarp laid out before a closed shop, taking a moment for coffee while waiting for their phones to ping with orders. It was three days before the platform they work for, Grab, made its historic U.S. listing: the largest SPAC deal ever at an expected US$40 billion in valuation, with the merger having raised $4.5 billion, making it, in turn, the largest-ever U.S. listing by a Southeast Asian company.

The drivers misunderstood when Rest of World informed them that Grab was about to become a public company. “They’re going to have Grab drivers in the U.S. now?” one of them said, raising his eyebrow, thinking that Grab was bringing its services to the country. “Do they have poor people in the U.S.?” another quipped. He explained what he meant: Do people in that part of the world also work as cheaply as people do here? 

Over the last year, Southeast Asia’s tech unicorns, including Grab and its main regional competitor, GoTo, have been preparing to list on U.S. markets. But for the millions of people who work for them as drivers and couriers, going public has unclear value. What they do understand is how new players have sprung up — among them taxi-ordering app Maxim, and delivery services AnterAja and Lalamove—in the past 3 to 4 years, sharpening competition. 

From where they stand, they see their days getting longer and their incomes declining, as the platforms are squeezed by growing competition — and by their desire to show potential shareholders that they can turn a profit. As those companies threw their energy behind raising billions of dollars in fresh fundraising during the pandemic, one study showed that drivers’ incomes dropped on average by 67% over the same period.

The pressure on those workers could cost the companies as it begins to increasingly feed into discontent. In a survey conducted earlier this year by Rest of World and the research company Premise, nearly half of the Indonesian delivery drivers who responded said they wanted to leave the job within a month; almost 60% of the respondents said they’d joined a union or other organized labor group. Experts said that the rising dissatisfaction with platform work could mean that companies could face a tighter supply of willing workers, and an increasingly militant labor movement. 

That movement may not have fully moved on the streets yet, Arif Novianto, a researcher at the Institute of Governance and Public Affairs at Gadjah Mada University, told Rest of World, but it’s surfacing in WhatsApp and Facebook groups and more focused unionizing“There’s a rising consciousness,” he said.

“Larger collective action is needed. They’ve begun to realize that so-called ‘wildcat strikes’ cannot deliver greater demands.”

Andi Kristiyanto is chairman of the fast-growing online drivers’ union Serikat Ojol Indonesia (Seroja), whose members are drawn from Gojek and Grab. The two companies are big employers in the region. Singapore-based Grab has over five million registered driver-partners (as it calls its contracted drivers), with Indonesia as one of its largest markets; GoTo, based out of Jakarta, said it had over two million drivers in the region in 2020.

On November 22, Seroja organized hundreds of drivers to swarm Gojek’s office in Solo, Central Java province, to protest a reduction in GoFood minimum delivery fees. In Solo, the fee per trip had been cut by 20% from 8,000 Indonesian rupiah (56 cents) for the first 4 kilometers of a trip to 6,400 rupiah (45 cents) for the first two. In Greater Jakarta, they’d been reduced by around 15% to 8,000 rupiah. 

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Gig workers in Indonesia are paid only per kilometer traveled, not for waiting time and canceled orders. It makes their income among the lowest of their kind in the world, with some earning less than 20,000 rupiah ($1.39) a day. 

A Gojek spokesperson told local media that the fee reduction would allow driver-partners to get more orders, due to shorter order completion times with shorter distances. Subsequently, he said, drivers could increase their potential income. 

“We have yet to receive a positive response from Gojek’s management,” Kristiyanto told Rest of World, speaking from the roadside, having just completed an order in the south of the city. “If this continues, we will come back with bigger numbers and take the matter to the Transportation Ministry.”

Across Indonesia, there have been at least 12 organized protests this year alone, with more ad hoc “wildcat” strikes. But the labor movement has struggled to build a collective momentum. It mainly consists of scattered communities or associations of a few thousand members each. Larger unions are rare — and aren’t exactly legal, since companies like Grab and GoTo do not recognize the gig workers as employees. There are rivalries between different groups, and the companies have enabled the divisions by backing certain clubs over others. 

Andie Kartala, chairman of the Front Independent Driver Online Indonesia — an association of 30 four-wheeler online driver communities across the country — claimed that Grab has created something called the “Sahabat Grab Club” (Grab’s Best Friends Club) as part of such an effort. Members of the exclusive club would be given priority orders, which he viewed as an unfair scheme. Such clubs are, as yet, unregulated under Indonesian law. Grab lists the club as a benefits program.

“That was just to break up the movement,” Kartala told Rest of World. Kartala himself has been blacklisted from Gojek and Grab for leading strikes in 2018. He now owns a small travel agency and continues to advocate for drivers’ rights through the association and legal aid foundations. 

According to Grab, the company believes it has involved its drivers in company decisions through regular town halls, dedicated WhatsApp channels, and by consulting with the country’s Business Competition Supervisory Commission (KPPU) on codes of ethics and regulation changes. A Gojek spokesperson said the company provided significant benefits, including access to insurance schemes and discounted data packages, and pointed to a joint study with the University of Indonesia that concluded the majority of drivers were satisfied with the company.

The fragmentation of the movement means it’s mostly been confined to small, isolated actions. Arif Novianto, the academic, said that needs to change if the unions and clubs really want to put pressure on the companies. “Larger collective action is needed,” he said. “They’ve begun to realize that so-called ‘wildcat strikes’ cannot deliver greater demands.”

That is beginning to happen. In June, drivers at GoKilat Driver, Gojek’s courier service, formed the Online Courier Union (Sejaring) after uniting to protest against a fee cut. In September, two cross-platform alliances were established: Laskar Malari, who demanded for legal clarity on the classification of online drivers, and Aliansi Ojek Indonesia. Meanwhile, the online two-wheel drivers union Seroja recorded growth from 120 members in August 2020 to more than 7,500 members in just a year, according to its chairman.  

But even as unions grow in size, leaders said that one big challenge for them is never truly knowing where to take up their demands. They feel as if the government bounces them around from one ministry to another. The Ministry of Transportation regulates matters like mandatory helmets, shoes, and other road safety measures, while the Ministry of Manpower can’t do much as long as online drivers are “partners” and not employees. 

Anthonius Malau, acting director of application control at the Ministry of Communication and Information Technology, confirmed. “We can only oversee the apps’ data security and [make] sure there [is] no ‘negative content,’” he said at the Initiating Digital Platforms’ Accountability event on Monday, November 29, when responding to Rest of World’s question about how the government might regulate gig workers’ rights. 

“Companies really have to be careful, because workers’ issues are a vital issue to increase the trust of investors.”

The companies’ plans to list could create a new point for the unions to apply pressure to investors, according to Bhima Yudhistira Adhinegara, director of the Center of Economic and Law Studies (CELIOS). “Companies really have to be careful, because workers’ issues are a vital issue to increase the trust of investors,” Yudhistira said. In the U.S., Amazon workers have been doing so, with occasional success.

Perhaps a bigger risk for the companies is that drivers will simply drift away from the platforms. Rest of World’s survey found that the Indonesian gig workforce is well-educated: more than 25% have a college degree or higher, and 90% had completed at least secondary education. 

Kartala, the leader of the four-wheeler driver association — who holds a degree in education and joined Gojek after resigning from a full-time role at the city council — said many of his college-educated colleagues have stopped working for tech platforms simply because the work is “unreliable for survival.” 

That is borne out by the statistics. Around 65% of gig workers in Indonesia can’t afford anything beyond food and basic expenses, according to Rest of World’s global gig workers survey; more than 20% said they cannot afford enough food for their family.

Roni, who was among the group of Grab drivers sitting on the orange tarp outside the shop on Monday morning, is one of them. He’s 39, has a wife and three children, and has been working as a Grab driver since his contract with a logistics company ended in 2018. His name has been changed to prevent retaliation from the company.

He said he can afford a modest amount of food for himself every day, though it’s a little tight for the family, so he gathers discarded cardboard boxes from shops and sells them for additional income. Two weeks ago, when the Grab app experienced disruptions across multiple countries, including Indonesia, Roni struggled to put food on the table.  “In the end, I had to borrow cash from neighbors,” he said.

Roni listened carefully to a further explanation about what a company listing was. “That’s well within their rights to do so,” he said in a low voice. “But please, improve the well-being of the drivers here in Indonesia first.”