Indonesian Gig Workers Impacted By COVID-19, Report Finds

Jakarta, Indonesia —September 9, 2020 — Flourish Ventures today released a new report examining how gig workers in the Indonesian informal economy – ridesharing drivers, online sellers, household services, and delivery workers – are coping with the COVID-19 pandemic.  Most have been hit hard, with 86% of respondents reporting a decline in income. 

The Indonesia Spotlight August 2020 report, which includes survey responses from 586 Indonesian gig workers, is the third edition of a series from Flourish called The Digital Hustle: Gig Worker Financial Lives Under Pressure. Flourish is a global venture capital investor focused on early-stage fintech investments that help people capture economic opportunity and improve their financial wellbeing.

Key findings include:

  • Indonesia gig workers earning more than Rp 3 million per month (US$ 200) saw a sharp decline from 43% in March 2020 to only 5% in June/July 2020. Additionally, there was a huge surge in gig workers earning less than Rp 1 million ($70) from 8% in March 2020 to a whopping 55% in June/July 2020.
  • 74% of respondents are very concerned about COVID-19. Gig workers are more concerned about the impact on their livelihoods (52%) than their health (14%).
  • Jobs that require in-person interaction were more severely impacted. 71% of home health providers (such as those offering mobile massage), 65% of ridesharing drivers and 55% of delivery drivers lost income. Online sellers and other household workers such as housecleaners were less affected.
  • No earnings gap found between genders. The report showed that men and women were affected equally by the COVID-19 economic downturn in Indonesia. In other countries surveyed as part of The Digital Hustle series, women were disproportionately impacted. 
  • Gig workers in big cities are the most severely affected. 63% of respondents lost income compared to 49% in smaller cities. 
  • Indonesian gig workers are living on the edge. Close to 60% of respondents said that if they lost their main source of income, they could not cover household expenses for a month without borrowing money.

“In the economic fallout from the COVID-19 pandemic, gig workers have been significantly impacted and remain financially vulnerable,” said Tilman Ehrbeck, managing partner at Flourish. “The gig economy enabled millions of workers in Indonesia’s informal sector, which has been historically underserved by the financial industry, to formalize their livelihoods and become more connected to digital finance. We undertook this research to understand how Fintech companies could better serve these gig workers, vulnerable individuals and small businesses during this crisis and in the future.”

Finding New Ways to Cope 

The Flourish report also asked Indonesia gig workers how they were adjusting to the COVID-19 crisis and found:

  • Among the 66% who reduced consumption, food was the top expense they cut. 
  • 61% of respondents discovered new or additional work, many through digital platforms such as online reselling or on-demand tasks.
  • Nearly 40% plan to seek new work in the coming months.

Opportunities for Fintechs

Despite the immediate concerns of the COVID-19 crisis, Indonesian gig workers are also focused on the future.

  • Saving for the future is gig workers’ number one short and long-term goal, with 81% of the respondents being very concerned about the ability to save for old age.
  • Security is top of mind, specifically, the risk of not being able to work. Most respondents are very concerned about not being able to work if they get sick or in an accident (66%), or if they damage their phone or car (59%).
  • Gig workers are more anxious about short-term cash needs than longer-term financing. 63% of respondents are very concerned about having sufficient cash to do their job, versus only 32% who are concerned about access to asset financing.

“The pandemic underscores the challenges Indonesia’s gig workers face, as well as their adaptability and entrepreneurial drive in the face of hardship,” said Smita Aggarwal, a global investments advisor at Flourish. “While gig workers have shown remarkable grit in the face of this crisis, we believe there is a meaningful opportunity for gig platforms and Fintechs to serve workers’ unmet financial needs and help with short-term liquidity, income protection, and longer-term resilience.”

Survey Methodology

Flourish partnered with research firm 60 Decibels and gig worker startup Sampingan to conduct the online survey of 586 gig workers in June 2020. The panel included 221 ridesharing drivers, 191 home service providers (such as house cleaners or beauticians), 109 online sellers, and 65 delivery workers. To view the full report and access the underlying data, visit: flourishventures.com/perspectives/perspectives-research/
app.60decibels.com/flourish-gigeconomy2020

As part of The Digital Hustle: Gig Worker Financial Lives Under Pressure, Flourish began tracking the experiences of gig workers across the globe in May 2020. It published the Brazil edition in June 2020 and the South Africa edition in July 2020. 

Back to Insights

Top Flourish News

No posts found! Try adjusting your filters.

Explore these posts...

By Post Type:

By Taxonomy: