The unsung hero of Industry 4.0: Couriers and drivers

In the beginning of April, Shopee found itself in hot water when tweets alleging the e-commerce company reducing its drivers’ fee from Rp2,000 to Rp1,500 per package went viral. Based on an interview TFR conducted with two Shopee Xpress couriers, it wasn’t the first time the company adjusted the rate.

“I used to receive Rp45,000 daily in compensation,” Bayu, who resigned from Shopee Xpress (SPX) in February, told TFR. The compensation was removed by the end of January. Bayu received Rp2,500 for a package. On top of that, he had to pay five instalments, each amounting to Rp100,000 for uniform.

“For Jakarta, the rate is Rp1,800 per package. Rp1,500 per package is for Surabaya, Semarang, Malang and Tasikmalaya. At Shopee Xpress, there is no gas fees, parking fees and other fees. Rp1,800/package is net. But at SPX, there is a guaranteed income. If a courier delivers 40 packages, he/she will get Rp115,000. The 41st package and beyond will be charged Rp1,800/package,” said Pardi*, another Shopee Xpress TFR interviewed who chose to remain anonymous.

*not his real name

SPX couriers have to use their own motorcycles. There is no compensation for motorcycle maintenance services. Couriers might have to pay for parking fees when they park at a building complex to deliver package, unless the customer tips them. The average parking fee at a building complex costs Rp2,000 for motorcycle.

After the news broke out, Shopee shared a statement to major news outlets, confirming that the rate has been adjusted to the market price and adhered to current regulations. The company told news outlets that the rate remains competitive in logistics industry.

“They (Shopee) didn’t explain in detail to courier partners, they just said this is for the company’s sustainability and they guarantee that with the reduced tariff, drivers will deliver more packages,” said Pardi.

Underpaid couriers is not a new issue in e-commerce. In 2019, SCMP published an article about Zalora couriers in Malaysia earning less than RM1960 in a month. The minimum wage recommended by the government was RM2,600. One courier interviewed by The Post once delivered 160 packages in a day. It was the highest number of packages he ever received. Couriers also have to use their own motorcycles.

No one can deny the benefits e-commerce bring to consumers and sellers. E-commerce becomes the main platform to purchase daily necessities when the rest of the world follows the stay-at-home order. Businesses, too, have to pivot to online sales and marketing.

E-commerce companies posted strong growth in 2020. Sales of food and beverage on Tokopedia tripled during the pandemic. Shopee in 2020 recorded daily average of 4.7 million orders. Bank Indonesia saw 140 million online transactions in August 2020, a drastic increase from 80 million transactions in 2019.

From the workers’ perspective, while the growth brings income, the pressure to pack and deliver packages in high speed and accuracy mounts. For instance, the recent news exposed Amazon warehouse workers’ working condition. Workers peed in bottles in order to keep up with the packages.

During special sale period when volume of orders blows up, SPX couriers told TFR they could deliver up to 80 packages a day. They have to travel back and forth to the warehouse and buyers. The most common challenge that couriers share is inaccurate address. “That is wasting time when we have to deliver a lot of packages,” said all the couriers.

Drivers of ride-hailing apps Go-jek and Grab voiced similar concerns - parking fees, inaccurate address and minor accident. Like SPX, drivers at Go-jek and Grab are considered ‘partners’ or freelancers. The system is almost similar to SPX, but the drivers receive more benefits.

“For BPJS Kesehatan (health insurance) and BPJS Ketenagakerjaan (workers social security), there is none until today. But I did hear from the management that they will start [providing BPJS] at the end of this month,” said Pardi.

Ricky Andrea who currently signs with Go-jek and Grab said there is no insurance from Go-jek, but the company has an insurance programme drivers can sign up for. ”From Go-jek itself, they don’t require [us to join the insurance programme], but they give us options. Partners pay a certain amount every day. For example, Rp2,000 will be deducted daily for our insurance premium,” said Ricky.

Adiyono, a Go-jek and Grab driver, said, “There is insurance, but there is no BPJS.” Another ride-hailing driver, Jaya, has a different answer. “I did receive BPJS. Isn’t it required by the law?” The Job Creation Law only requires companies to pay BPJS to contract and permanent workers.

Aside from insurance, the companies also hand out vouchers for motorcycle services. “For motorcycle service/oil change, usually the company gives out voucher,” said Adiyono. Ricky and Jaya mentioned similar programmes regarding motorcycle maintenance services. “Go-jek gives out certain promotional deals and discounts at certain places. It’s an option, but partners can take it,” said Ricky.

Before working as an online driver, Jaya worked as a courier at a logistics company. He compared his experience at both companies. With the logistics company, contract workers get a base pay while the freelancers don’t. The logistics company Jaya worked at only employs freelancers when there is a large volume of packages to be sent. “They usually do that (hire freelancers) during special sale period like 9.9 or 10.10,” said Jaya.

Based on the answers, there is certainly a stark difference between a logistics company and e-commerce or ride-sharing apps. Even though the bread and butter of Go-jek and Grab is transportation, they label themselves as tech companies that provide the technology to support drivers and users. The main focus is the technology. SPX is also a support system to the e-commerce platform. Building in-house delivery division is a strategic move to deliver products faster and cut cost.

The gig economy: Should we embrace it?

When Uber introduced ride-sharing app in 2009, democratising drivers became the tagline. Flexibility and freedom are its focal points since drivers could choose when they want to work and which orders they want to accept. Uber was hailed as a disruptive start-up and more alike businesses started to emerge. The business model drives the trend of the gig economy.

A gig economy is a free-market system build on flexibility, independency, short-term contract or temporary position. It reduces costs and minimises risks. It could be beneficial for small companies with limited budget. The gig economy also thrives during an uncertain time like pandemic.

However, flexibility and freedom of the gig economy have their downsides too. Gig workers have a lot in common with entrepreneurs. They are responsible for their own project, income and insurance. There is no job security and monthly income depends on the number of gigs a freelancer is able to land. In some cases, it can disrupt work-life balance since working anywhere, anytime can translate to any hour in a day.

“I could finish delivering all the packages at midnight because they have to be delivered that day,” said Pardi. “The system is a mess.”

“They sometimes started scanning packages in the afternoon, then the captain will assign packages to couriers when the scanning is done. We start delivering at 3 or 4 pm and finish at around 11 pm to midnight,” said Bayu. They are clocked eight hours a day.

Before the resurgence of tech start-ups, gig workers predominantly work in the creative industry - musicians hopping on one gig to another, freelance writers, freelance designers, stylists, make-up artists and many more. But those freelancers have more room to negotiate their pay as opposed to couriers and drivers.

For starter, they are not dependent on one company. Designers, for instance, can pitch their service to numerous companies. They can negotiate higher pay based on their track record. Couriers, on the other hand, are tied with an app. They have to be logged in to land a job. This is also one of the reasons why the UK’s Supreme Court in February ruled that Uber drivers must be treated as employees instead of freelancers.

In addition, the aforementioned flexibility are up for debate. French’s court in 2020 classified Uber drivers as employees. Quoted from TechCrunch, “If the driver declines too many rides or gets bad ratings, the driver can lose access to their account. The driver participates in a managed transportation service and Uber unilaterally defines the operating terms.”

As for Go-jek and Grab, both apps impose daily target drivers have to achieve. Go-jek’s system works like a membership, according to Adiyono. “There is daily target from the apps. Grab is 90 diamonds per day. As for Go-jek, the targets are different, depending on the drivers’ level (basic, silver, gold, platinum). For me (basic), at least 900 points per day,” Adiyono explained.

“The performance level depends on the orders we take or ignore, or the ones we cancel. When a driver just begins the job, the performance level will be 100%. If there are two orders and I only take one, my performance level will be 50%. If there are four orders and I take one, it will be 25%,” said Ricky. The points drivers receive from each service on the app vary.

“Not every driver’s account is the same. There are drivers that can receive plenty of orders,” Ricky explained. For instance, if an order comes in at an area and there are three drivers nearby, the app will assign the order to a driver with ‘cleaner’ record - rarely cancels order and isn’t picky with orders. “Drivers that receive one-star rating will be suspended. [Drivers who commit] Harassment might be cut off. Usually first, second suspension, then cut off. Suspension is like a warning.”

The working hours are more flexible for both Go-jek and Grab, but the app might freeze account that has been inactive for a month, said Ricky. SPX couriers have to clock in at least three days a week.

Another thing to consider is the type of skills required to compete in the gig economy. With writers or designers, body of work and services vary. Courier, however, is a menial job. Frankly speaking, anyone who can ride motorcycle can be a courier. Adding to that, Indonesia has a large pool of low-skilled labour. They are more likely to be exposed to exploitation and risk losing job due to automation.

For Pardi and his colleagues at SPX, they don’t see any value to the changes that Shopee’s management enforce. In fact, they believe that the changes will drag down the couriers’ performance. “The reduced manpower at the hub causes slower delivery to customers. Couriers receive less pay and they have to add in extra hours.”

“The companies take 20% off our orders. I hope that can be reduced,” said Ricky when being asked about his feedback to the ride-sharing apps. “Followed by education to customers, I think. Customers and drivers need to be educated. Drivers, too, must be given specific education, like the system and ethics. I hope the company can educate more than [giving out] promotional deals. Those deals are also important, but these things need attention.”

Some may argue that low pay is better than none. Others may suggest resigning from the job. Nevertheless, there is one solution that all couriers agree on, “I hope they pay more attention to their couriers.”