Platform Labor, Innovation or Illegal? | Be Korea-savvy

Platform Labor, Innovation or Illegal?

Delivery workers with app-based firms in South Korea launched their own labor union, named the Rider Union, on May 1, 2019. (Yonhap)

Delivery workers with app-based firms in South Korea launched their own labor union, named the Rider Union, on May 1, 2019. (Yonhap)

SEOUL, Nov. 8 (Korea Bizwire)Last Tuesday, the Ministry of Employment and Labor recognized the status of delivery people at Yogiyo, a South Korean food delivery platform, as workers, raising controversy over how to address platform labor.

Platform labor refers to a form of labor achieved through intermediary platforms such as mobile apps.

Food delivery service offered via delivery apps shows the stark difference between platform and traditional labor.

When customers use an app to order food, the order is sent to restaurants and delivery agencies in real-time, and the delivery person closest to the restaurant delivers the food, which is fundamentally different from how a delivery person hired directly by a restaurant works.

Delivery workers employed through apps do not sign a ‘labor contract.’ Instead, they are freelancers, working as ‘outsourced agencies’.

That is why platform service providers call them ‘platform agents,’ instead of calling them workers.

Platform labor is spreading throughout various service sectors including chauffeur, quick delivery, home assistance, and small errands.

Translation and interpretation, legal aid, as well as design are also being provided through various platform channels.

The Korea Employment Information Service (KEIS) estimated that there are 540,000 people working as platform agents in South Korea.

The case at hand is that most platform agents work under poor conditions.

In addition, they are excluded from being protected by various labor laws, including rules on minimum wage, since they are not legally recognized as ‘workers,’ placing them in a blind spot of the social safety net.

According to a KEIS study, a platform agent makes an average of 1,639,000 won (US$1,415) per month (pre-tax). Another 36.5 percent of platform agents said they make less than 1,000,000 won each month.

Delivery workers complain that they have to pay delivery agencies an exorbitant amount as commission.

In a focus group interview conducted by the KEIS, quick service agents were found to pay as much as 20 percent of their wages as commission.

Platform agents were found to work approximately 36.9 hours per week. As for food delivery, 45.9 percent of delivery agents said they work more than 53 hours weekly.

Only 34.4 percent of respondents said they have employment insurance, which is less than half the percentage of wage workers holding employment insurance (71.6 percent) in 2018.

Without employment insurance, workers are not entitled to receive unemployment benefits even after they lose their job.

That is why the recent decision by the Ministry of Employment and Labor to partially recognize Yogiyo delivery men as workers is seen as a game-changing move.

Tada is a rental van-hailing service operated by VCNC, a subsidiary of car-sharing startup SoCar. (Yonhap)

Tada is a rental van-hailing service operated by VCNC, a subsidiary of car-sharing startup SoCar. (Yonhap)

It also reflected the sad reality of platform agents working as ‘freelancers’ while, in fact, they work as much as any other worker.

While ‘freelancers’ should be entitled to autonomously schedule their work, many delivery workers are currently being ‘supervised’ by managers, which is seen as a sly move by platform businesses to avoid various duties and responsibilities bound by labor laws by agreeing to ‘outsource’ their work instead of signing a ‘labor contract,’ while managing and supervising delivery agents as if they are ‘workers’.

This is where platform businesses are being blamed for conducting illegal activities of exploiting laborers to maximize profits, a backward move by those calling out the slogan of ‘innovation’.

Tada, a South Korean shared mobility platform recently sued by prosecution, is also being blamed for similar reasons.

The prosecution argued in its indictment against Tada that the mobility platform illegally controlled and supervised working hours, means of transportation, and standby areas of its drivers.

On the other hand, there are also concerns that South Korea’s social safety net is too fragile to address the rapidly changing labor market driven by technological advancement.

Experts argue that the social safety net should be bolstered to alleviate the impacts coming from innovation.

To accept platform agents into the social safety net, various programs such as employment insurance should be expanded to cover all laborers in the long term.

“Rearranging labor laws should go hand-in-hand with a stronger social safety net,” said Prof. Kwon Hyuk from Pusan National University Law School.

“We need to come up with a way to impose those who benefit from change in the labor market with responsibilities to take charge of bolstering social safety net.”

H. M. Kang (

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