In African cities, the “gig economy” is called the economy

A vehicle of Uber operating taxi in Nairobi. Net photo.

One of my favourite anecdotes from a few years back is of the Nairobi Uber driver who asked this New Yorker, “Do they have Uber in the US?” Since then, I’ve encountered many drivers from Lagos to Cape Town and noted how quickly ride-sharing has spread in some of the big African cities, although not without its challenges.

It’s also been interesting to see the rapid rise of Airbnb as a much-needed alternative in some of Africa’s largest cities which have a shortage of affordable international standard hotels. Again, what seemed unlikely just a few years earlier has made a notable impact.

Uber and Airbnb are a big part of the discussion about the “gig economy,” but they’re actually a small part of the various types of short-term, freelance work many people now do around the world, access to which has been made more efficient by technology.

For many African countries, the gig economy could just be called “the economy.” For example, just 17% of Kenyan employment is formal. Many of these economies are driven by the informal nature of the gainful employment that exists.

The Center for Global Development addresses this in a paper this month which notes digital platforms help African freelance workers and budding enterprises on the path to formalization.

But while this isn’t unique to Africa, it points out that Africa needs these services more than other parts of the world: “Most entrepreneurs have never worked in the formal sector, nor do they have mentors who have created larger businesses.”

CGD’s research found people in African cities tend to like this type of flexible work, be they ride-share drivers, e-commerce sellers, or home-stay hosts. Some even saw these jobs as “aspirational,” even for some who have formal jobs. And, helpfully, CGD identifies another mass category of African e-worker called “digital translators.”

In this context, it means companies like Kenya’s Safaricom employing 5,400 people formally, but having another 130,000 mobile-money outlets, which typically employ one or two people. Or e-commerce leader, Jumia, which employs 3,000 people across Africa, but has another 100,000 commission-based affiliates who help customers make orders.

Of course, it’s not all plain-sailing with gig work in African countries, just like with operating in more advanced economies. Disruption has raised tensions in certain traditional sectors where high unemployment means the stakes are even higher. There are also the same questions of whether gig workers will get a fair share of profits.

There does seem a better opportunity for African governments to raise much needed taxes in the medium to long-term, but for now CGD suggests that the best option to make gig work better might be to “recognize it for what it is, neither formal employment nor self-employment, and not as one job but a portfolio of different gigs.”

Quartz

 

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