A recent survey report released by Flourish, a global venture capital firm with portfolio investments throughout Africa has shown that a particular set of digital skill workers known as Gig workers, who are online workers with specific digital skills, now largely live by borrowing to make ends meet.
This is despite the fact that they are workers on monthly salaries.
The South African survey was part of a bigger study carried out in May this year, tracking the experiences of gig workers across the globe. The firm released the Brazil edition in June 2020, and is currently fielding surveys in India, Indonesia, and the US.
With each of its country-specific studies, Flourish aims to help fintech entrepreneurs connect with the people most in need of aid and better understand their needs.
The survey seeks to reveal the impact of COVID-19 on Gig Workers and their experience across the globe.
The report tracked the experiences of gig workers, including those who use digital platforms such as e-hailing or delivery apps, to learn more about how they are faring during the COVID-19 pandemic.
Analysing the report, Managing Partner at Flourish, Arjuna Costa, said: “Digital platforms have made it possible for workers around the world to participate in the gig economy, providing a degree of formality and stability to their work.
“When the coronavirus outbreak caused the global economy to come to a halt in Q1 of this year, workers were severely impacted. By tracking gig worker experiences in South Africa, and elsewhere, we hope to open conversations about how Fintech companies can build lasting solutions for the vulnerable population of citizens.”
Surveying more than 600 South African gig workers, Flourish found that 76 per cent experienced a large decrease in income since March 2020. The report also summarised how gig workers are coping with economic dislocation.
According to the report, approximately four out of five workers now earn less than $240 per month, compared to 16 per cent before the COVID-19 lockdown.
The report stated that, “91 per cent are very concerned about COVID-19, specifically, how gig workers believe it will affect their ability to earn an income and the risk to their family’s health.
“Some gig workers are impacted more than others. E-hailing drivers were twice as likely as delivery workers to report a significant decline in quality of life, with 83 per cent suffering a large decrease in income. Coping strategies among South African gig workers vary.
“Some have a financial cushion, but a majority live on the edge. If they lost their main source of income, 58 per cent of respondents reported they could not cover household expenses for a month without borrowing. Most have made sacrifices to cope with the pandemic and accompanying economic dislocation.
“Over half of gig workers have already reduced their household expenses, almost half borrowed money, and nearly three out of four had to rely on savings.
“Yet, only one in five are seeking additional income – a low figure possibly driven by the strictly enforced COVID-19 lockdown.”
As part of the survey questionnaire, gig workers were asked to share anonymous comments to describe how they are faring in the current conditions.
“People are not buying as they used to do,” said a delivery driver. “The number of deliveries has dramatically dropped. It is a big challenge now.” An e-hailing driver said, “We are eating two meals a day. That is what we can afford now.”
The report projected that in the next six months, nearly all respondents plan to restart or continue the work they were doing before the lockdown. The majority are concerned about the ability to earn an income, find work, cover day-to-day work expenses. For four out of five people, health risk associated with returning to work was not a top concern.
Despite recent hardship, Flourish expects continued growth in online platforms and financial tools to support gig workers. In addition to these findings, the South African edition of the survey provides early insights into how platforms and financial services providers can best serve this emerging digital workforce.