tag:theconversation.com,2011:/us/topics/grab-37821/articlesGrab – The Conversation2021-06-22T16:41:25Ztag:theconversation.com,2011:article/1629682021-06-22T16:41:25Z2021-06-22T16:41:25ZSpacs: why investors fell in love with these stock market vehicles – and how the bubble burst<p>What do Taylor Swift’s record company and Asian “superapp” Grab have in common? They are both part of Wall Street’s recent dealmaking fad: special purpose acquisition companies (Spacs). </p>
<p>Spacs are shell companies that are floated on the stock market with one purpose: to buy another company. This aims to achieve the same as a stock-market listing or initial public offering (IPO), but in reverse. Instead of a traditional company seeking to raise capital from investors through an IPO, with Spacs the empty listed company is set up first. For this reason, they are sometimes known as blank-cheque companies. </p>
<p>Depending on where the Spac is listed, whoever is in control usually has two or three years to find a company to buy. If they fail, the Spac will be wound up and the funds returned to investors. </p>
<h2>The Spac explosion</h2>
<p>Spacs have been around since the 1990s, but they <a href="https://www.forbes.com/sites/greatspeculations/2021/03/22/what-are-spacs-and-why-is-everyone-talking-about-them-right-now/?sh=779f1f933260">exploded in popularity</a> in 2020 and early 2021. This is partly because there has been <a href="https://www.excelsiorgp.com/resources/what-is-a-spac-and-why-are-they-suddenly-so-popular/#:%7E:text=Because%20the%20stock%20exchanges%20make,exits%20has%20seen%20a%20decline">more and more capital</a> looking to make money, since bonds have been paying unattractively low interest rates, and far fewer companies are listing than in previous decades. </p>
<p>Regulations have made traditional flotations slower and more expensive. Flotations are also traditionally underpriced on the day of listing to drum up investor interest. But a crucial advantage of Spac deals is that they are privately negotiated and avoid the risk of money being “left on the table”. </p>
<p>High-profile deals involving Spacs have included <a href="http://www.parabolicarc.com/2021/02/18/why-virgin-galactic-went-spac/">Virgin Galactic</a>, sports betting group <a href="https://hindenburgresearch.com/draftkings/">DraftKings</a>, and a digital manufacturing firm <a href="https://markets.businessinsider.com/news/stocks/serena-williams-spac-take-velo3d-public-16-billion-deal-ipo-2021-3-1030236391">called Velo3D</a> whose Spac has Serena Williams on the board. </p>
<p>More recently <a href="https://www.theguardian.com/business/2021/apr/13/super-app-grab-to-go-public-in-record-40bn-spac-merger">Singapore-based app Grab</a>, which offers everything from ride hailing to online banking, has done a Spac deal which will see it valued at US$40 billion (£29 billion). And star US hedge fund manager Bill Ackman, who created the biggest Spac ever in 2020 with a value of US$4 billion, is using it <a href="https://www.ft.com/content/d77d9883-6b01-4458-9180-8579aa4d346f">to buy 10%</a> of Universal Music, whose roster includes Taylor Swift, Kanye West and Sting. </p>
<p>Yet despite this eye-catching activity, many would say the bubble in Spacs <a href="https://www.barrons.com/articles/the-spac-bubble-has-popped-where-to-find-bargains-now-51621040743">has burst</a> recently. <a href="https://www.ft.com/content/88d7f577-9bfa-4215-b57b-0f8a4da3644a">Only 30</a> Spac flotations took place in April and May compared to 299 in the first three months of the year, while total Wall Street investment-bank revenues derived from these vehicles has fallen from over 20% to under 5% over the same period. </p>
<p>Finally, the two largest US exchange-traded funds focused on Spacs – <a href="https://www.defianceetfs.com/spak/">SPAK</a> and <a href="https://www.spcxetf.com/">SPCX</a> – are down 26% and 12% in value respectively from their February highs. This is probably linked to US regulator the Securities and Exchange Commission (SEC) <a href="https://observer.com/2021/04/spac-deal-ipo-slowdown-april-sec-crackdown/">beginning to</a> rein in the sector to <a href="https://www.cnbc.com/2021/05/27/sec-considers-new-investor-protections-for-spacs.html">protect retail investors</a>.</p>
<p>Though in my view the rate of Spac creation would have slowed down to reach a lower equilibrium anyway, the SEC intervention is reducing some of the benefits to using Spacs as a way of accessing the capital markets. <a href="https://www.ft.com/content/99de2333-e53a-4084-8780-2ba9766c70b7">For instance</a>, the SEC has made it harder for Spacs to reward early investors with shares in a company after an acquisition, and is looking at preventing the management from making statements about future profitability. </p>
<p><strong>SPAK share price, October 2020 to June 2021</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="SPAK weekly share price rising, falling and then rising slightly" src="https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=343&fit=crop&dpr=1 600w, https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=343&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=343&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=431&fit=crop&dpr=1 754w, https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=431&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/407098/original/file-20210617-19-14n3okf.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=431&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">*SPAK is the ticker symbol for the Defiance Nx Gen SPAC Derived ETF.</span>
<span class="attribution"><a class="source" href="https://uk.tradingview.com">Trading View</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>The bitcoin parallel</h2>
<p>Regulators often resist financial innovation in the hope of reducing the uncertainty in investing. It is not by chance that Gary Gensler, the SEC chair, <a href="https://www.sec.gov/news/testimony/gensler-2021-05-26">recently associated</a> spacs and bitcoin when he spoke of the need for better investor protections. As with Spacs, <a href="https://news.bitcoin.com/ecb-chief-lagarde-cryptocurrencies-money-laundering-no-intrinsic-value-buy-prepared-to-lose-all-money/">regulatory moves</a> to <a href="https://www.reuters.com/technology/chinese-financial-payment-bodies-barred-cryptocurrency-business-2021-05-18/">restrict the use</a> of bitcoin and other cryptocurrencies have probably contributed to prices falling lately (along with other worries such as <a href="https://theconversation.com/bitcoin-what-elon-musks-u-turn-on-tesla-payments-means-for-future-of-crypto-160891">bitcoin’s carbon footprint</a>). </p>
<p>And that’s not all Spacs and bitcoin have in common. Bitcoin is e-money that can circulate anonymously among infinite users without needing banks or a central issuing authority. But these potential benefits depend on enough users accepting it as a store of value. To paraphrase something <a href="http://www.inquiriesjournal.com/articles/241/the-universal-prayer-how-money-became-the-worlds-first-shared-religion#:%7E:text=We%20all%20believe%20in%20money,define%20them%20in%20those%20terms.">said of</a> currencies in general, bitcoin is like a religion, based on faith. </p>
<p>The same is true of Spacs, in that public investors entrust the management to find a suitable takeover target. And both bitcoin and Spacs disrupt the common wisdom around an established financial practice. While bitcoin is a new way of exchanging value, some have described Spacs as the <a href="https://fortune.com/2021/05/22/spacs-ipo-stock-grab-arrival-deliveroo/">second coming of the IPO</a>. </p>
<p>In part due to the severe restrictions that a traditional IPO places on how a company may communicate its story, companies not yet producing revenues had been staying private for longer. Spacs changed this, and in the process became a way for amateur investors to be part of late-stage venture capital funding. Instead of only accredited professionals and insiders providing such funding to new companies, Spacs open them up to anyone – particularly in an era where stock-market investing has been made easier thanks to apps like Robinhood and eToro. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Picture of man holding phone with eToro loading up" src="https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/407646/original/file-20210622-13-5sk99l.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The new investing.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/assam-india-february-19-2021-etoro-1927328462">sdx15</a></span>
</figcaption>
</figure>
<p>Again, the <a href="https://dailyhodl.com/2021/04/16/crypto-asset-market-could-surge-500x-investors-dont-realize-magnitude-of-whats-happening-raoul-pal/">same is said</a> of bitcoin and other cryptocurrencies: if amateur investors think a crypto project could eventually go stellar, by buying and holding the relevant coins they can invest far earlier than with equivalent projects in previous decades.</p>
<p>In this way, investors can make bets on whether new kinds of investment like Spacs and crytocurrencies will succeed. Inevitably they need to be regulated, but regulators will need to be careful in how they handle these nascent products if they want them to develop. Vehicles for creating future wealth, be it Spacs or bitcoin or anything else, are underpinned rather than undermined by uncertainty.</p>
<p>They have developed systems for <a href="https://ideas.repec.org/a/pal/jbkreg/v21y2020i2d10.1057_s41261-019-00100-5.html">self-regulating</a> by specialists <a href="https://news.law.fordham.edu/jcfl/2021/03/10/dulcis-in-fundo-a-re-thinking-of-spacs-and-the-spacs-promote/">who often understand</a> the needs of the various players better than the regulators themselves. In the case of Spacs, regulators should focus on ensuring that the financial information published by the companies involved is truthful and consistent – so, for instance, the SEC is right to be <a href="https://www.ft.com/content/99de2333-e53a-4084-8780-2ba9766c70b7">tightening up</a> on to what extent Spac operators disclose conflicts of interest.</p><img src="https://counter.theconversation.com/content/162968/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Daniele D'Alvia has previously received funding from Birbeck College, University of London to write the first PhD in the law of Spacs. He is the CEO and founder of Spacs Consultancy, which is focused on investment vehicles and Spacs. </span></em></p>Both Spacs and bitcoin went rocketing up in price only to come crashing back down. And that’s not all they have in common.Daniele D'Alvia, Teaching Fellow in Banking and Finance Law, Queen Mary University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/950322018-04-18T12:04:34Z2018-04-18T12:04:34ZCan Grab and Gojek drivers in Indonesia build a solid union?<figure><img src="https://images.theconversation.com/files/214846/original/file-20180414-105522-8qyqzv.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C995%2C663&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Online drivers work independently. But to improve their working conditions, drivers need to organise collectively.</span> <span class="attribution"><span class="source">findracadabra/www.shutterstock.com</span></span></figcaption></figure><p>Motorcycle taxi drivers for online ride-hailing services recently rallied in Jakarta demanding that the government protect the interests of workers engaging in precarious work in the growing sector. </p>
<p>The protest was held a day after <a href="http://www.thejakartapost.com/life/2018/03/27/grabs-acquisition-of-uber-how-it-will-affect-indonesian-users.html">Malaysia-based ride-hailing firm Grab announced it’s taking over Uber’s Southeast Asian operation</a>. The acquisition makes Grab and Indonesian-based Gojek the leading players in the Indonesian market. </p>
<p>The drivers <a href="https://tirto.id/ribuan-pengemudi-ojek-online-demo-di-depan-istana-negara-cGN7">want</a> the government to regulate ride charges, insurance and other matters related to their work. They also demanded the government push companies to set a higher basic tariff and increase drivers’ income.</p>
<p>But their efforts to build an organised movement to advocate for their interests might run into formidable challenges, as the labour force in the sharing economy is fragmented. Workers work independently and are physically separated from each other. Furthermore, the drivers’ protests occur in a context where labour and civil society organisations are struggling with the legacies of decades of demobilisation under authoritarianism.</p>
<p>Currently, apps-facilitated ride-hailing services run by well-funded start-ups are regulated under a 2017 decree released by the Transportation Ministry. This regulation enables the government to set a price cap on these services. Vehicles are now subject to minimum engine capacity and roadworthiness standards. </p>
<p>Under law no. 22/2009, however, <a href="https://tirto.id/tuntutan-pengemudi-ojek-daring-terganjal-uu-lalu-lintas-cAzv">motorcycles cannot be classified as public transportation</a>. Therefore, the operation of these ride-hailing motorcycle taxis and their drivers’ interests remains unregulated.</p>
<h2>Gig workers collective action</h2>
<p>The rise of ride-hailing services in big cities in Indonesia is part of a global growth trend of so-called <a href="http://www.wired.co.uk/article/what-is-the-gig-economy-meaning-definition-why-is-it-called-gig-economy">“gig”, “sharing” and “on-demand” economy</a>. The companies that are creating digital applications to bring various services – from transportation and cleaning to running errands – to customers rely on a temporary and flexible workforce. </p>
<p>In big cities around the world, the rise of the on-demand companies, such as Uber, has prompted <a href="http://prospect.org/article/demand-and-demanding-their-rights">drivers to take collective action</a>. </p>
<p>In the US, protests against Uber have been mostly small and sporadic. These have <a href="http://irle.berkeley.edu/labor-platforms-and-gig-work/">yet to lead to the sustained pressures needed to evoke a successful response to drivers’ demands</a>. Drivers have thus been represented by both traditional unions and alternative labor organizations in courts, legislative arena, and in private consultation with Uber</p>
<p>In Indonesia, ride-hailing drivers have also formed associations to represent their interests as a collective. They have taken to the streets to voice their concerns over <a href="https://www.techinasia.com/gojek-lowers-prices-spur-demand-drivers-protest">low pay</a> and companies’ <a href="http://www.thejakartapost.com/news/2016/10/03/hundreds-of-go-jek-drivers-protest-unfair-policy.html">unfair policies</a>. </p>
<h2>Challenges in building a solid union</h2>
<p>The drivers work independently. Yet, collective grievances associated with payment and working conditions create the need for collective organisation. The recent drivers protests might indicate a move towards <a href="http://webcache.googleusercontent.com/search?q=cache:fDdhoFaPhUwJ:www.isrsf.org/files/download/442+&cd=3&hl=en&ct=clnk&gl=au">collective resistance against exploitative working condition</a> and towards <a href="http://www.insideindonesia.org/the-go-jek-effect">collective bargaining on wages and working conditions</a>.</p>
<p>Whether the collective action can be transformed into a solid union, with a strategy and agenda able to influence progressive labour reform, remains to be seen.</p>
<p>Several social conditions that may challenge the drivers’ efforts to transform collective action into a solid union. </p>
<p><strong>1. Majority of online drivers do not feel exploited</strong> </p>
<p>Under the flexible employment system, the drivers are hired under short-term or one-off contracts. Furthermore, the advanced use of digital apps allows automated online control over work processes. This maximises workers’ productivity. </p>
<p>Many of the drivers enjoy the flexibility and freedom and willingly consent to following the logic of capital. Although thousands of online motorcycle taxi drivers join rallies to protest, studies on <a href="https://drive.google.com/file/d/0B1gQfkoFPIosTzNiS01vX3J5UnM/view">Gojek</a> and <a href="https://www.grab.com/id/en/press/consumers-drivers/studi-menunjukkan-grab-mendorong-dampak-positif-para-penumpang-dan-mitra-pengemudinya/">Grab</a> drivers show that the majority of them are satisfied with their income and working condition. </p>
<p>The work process in the gig economy lures drivers to be self-reliant in maximising their productivity and earning more income. For many of them, consolidating a solid union with a clear strategy and agenda might consume too much of the time and energy they allocate to work. While drivers may unite with each other to address short-term problems, it would be more challenging for them to establish a solid union.</p>
<p><strong>2. Driving for additional income</strong> </p>
<p>Studies on <a href="https://drive.google.com/file/d/0B1gQfkoFPIosTzNiS01vX3J5UnM/view">Gojek</a> drivers show that many of them are not entirely dependent on incomes from the online ride-hailing service. With the <a href="https://kevinhewison.files.wordpress.com/2011/02/kalleberg-and-hewison-2015.pdf">pervasiveness of the informal sector</a> and the <a href="http://www.thejakartapost.com/news/2015/07/07/social-security-all-workers.html">unreliability of the social security schemes</a>, it is not unusual for Indonesians to engage in multiple income-earning activities. </p>
<p>One of the requirements to establish a strong union is a sense of social solidarity. This may be challenged by the fact that online ride-hailing drivers are fragmented across different means of survival. Most Gojek drivers have other jobs. They join the online platform to earn extra income.</p>
<p><strong>3. Traditional labour unions ineffective in representing gig workers</strong> </p>
<p>Support from broader organised labour and social movements may leverage the impact of the drivers’ protest and support their transformation into a solid union. The Federation of Indonesian Metal Workers Union <a href="https://fspmi.or.id/setelah-gojek-grab-dan-uber-bergabung-dengan-fspmi.html">has recruited</a> online ride-hailing drivers as members. Yet unions have had limited infrastructures to organise outside their traditional base, the industrial workers.</p>
<p>This is partly due to <a href="http://www.insideindonesia.org/labour-takes-a-citizenship-approach">decades of demobilisation of the organised labour movement and broader civil society organisations</a> under the authoritarian regime. It has become even more challenging to organise workers now that the employment system has become increasingly flexible.</p>
<p>Even in the US, where unions and alternative labour groups have represented the atomised ride-hailing drivers in the legislative and judicial arenas and in negotiation with the companies, <a href="http://irle.berkeley.edu/labor-platforms-and-gig-work/">little has been accomplished</a>.</p>
<p><strong>4. Limited engagement by civil society organisations</strong> </p>
<p>Society-based organisations appear to be detached from the drivers’ protests. They seem to be absent from workers’ collective action.</p>
<p>Meanwhile, workers in the informal sector, from which the online taxi services recruit most of their drivers, have been the target of mobilisation by different actors for various ends, including <a href="https://www.tandfonline.com/doi/abs/10.1080/00472336.2016.1197959">violent groups voicing reactionary agendas</a>. This could further hinder the consolidation of a solid union.</p>
<h2>What next?</h2>
<p>Online ride-hailing drivers’ protests represent the seed of collective organisation. Yet, as work is increasingly fragmented and atomised, and labour and civil society organisations are struggling with the legacies of authoritarianism.
it will not be easy to transform the sporadic protests into a solid union.</p>
<p>We need to think of ways for the organised labour and broader civil society movement to strategically connect themselves with the drivers’ protests, while acknowledging the formidable challenges.</p><img src="https://counter.theconversation.com/content/95032/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Para penulis tidak bekerja, menjadi konsultan, memiliki saham atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi di luar afiliasi akademis yang telah disebut di atas.</span></em></p>Drivers for online ride-hailing services face several social conditions that may challenge their efforts to transform collective action into a solid union.Diatyka Widya Permata Yasih, Lecturer, Department of Sociology, Universitas IndonesiaAndi Rahman Alamsyah, Lecturer in Sociology, Universitas IndonesiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/919292018-03-02T09:24:26Z2018-03-02T09:24:26ZIndonesia urgently needs personal data protection law<figure><img src="https://images.theconversation.com/files/207952/original/file-20180226-140208-gsufw7.jpg?ixlib=rb-1.1.0&rect=4%2C2%2C994%2C663&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The collection of huge data sets that can be searched, collected and cross-referenced is called Big Data.</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>Google – a company with <a href="https://academic.oup.com/idpl/article-abstract/7/1/36/3097625?redirectedFrom=fulltext">several data protection issues</a> – recently <a href="https://techcrunch.com/2018/01/28/google-confirms-go-jek-investment/">invested more than US$1 billion</a> in Indonesia’s popular ride-hailing app Go-Jek.</p>
<p>While transport apps such as Go-Jek and Grab have <a href="http://aitinesia.com/ngerinya-pelanggaran-privasi-yang-dilakukan-go-jek-dan-grabbike-terhadap-penumpang-mereka/">quickly grown in cities like Jakarta</a>, they also have some problems with customer data. </p>
<p>Companies such as Google, Go-Jek and Grab not only provide services for their users. They also collect personal data of their users. Companies, individuals and government can all collect personal data. </p>
<p>The collection of huge data sets that can be searched, collected and cross-referenced is known as Big Data. Law scholar Yvonne McDermott <a href="https://www.researchgate.net/publication/315449761_Conceptualising_the_right_to_data_protection_in_an_era_of_Big_Data">argues</a> that in the era of Big Data four key values must be upheld: privacy, autonomy, transparency and nondiscrimination. </p>
<p>In Indonesia, none of these values in regard to Big Data are enshrined under law. Indonesia does not have any comprehensive personal data protection law or regulation that protects Indonesians from misuse of data.</p>
<p>Increased foreign investment in the digital economy means a national conversation is needed to ensure citizens don’t get exploited. </p>
<h2>Examples of personal data protection</h2>
<p>Indonesians urgently need a comprehensive data protection framework. Around the world there are several instructive examples.</p>
<p>International human rights regulations already cover digital privacy, building on concepts <a href="http://www.ohchr.org/EN/UDHR/Documents/UDHR_Translations/eng.pdf">in multiple</a> <a href="http://www.un.org/en/universal-declaration-human-rights/">declarations</a> on human rights and freedom.</p>
<p>The United Nations General Assembly in 2013 agreed on the right to privacy, <a href="https://news.un.org/en/story/2013/12/458232-general-assembly-backs-right-privacy-digital-age">asking its members to be transparent and accountable when collecting personal data</a>. </p>
<p>Indonesia’s neighbours, Singapore and Australia, have enacted privacy laws. <a href="https://www.oaic.gov.au/privacy-law/privacy-act/">Australia enacted its Privacy Act in 1988</a>, while Singapore enacted its <a href="https://www.pdpc.gov.sg/Legislation-and-Guidelines/Legislation">Personal Data Protection Act in 2012</a>. </p>
<p>The European Union (EU) has the <a href="https://www.eugdpr.org/">General Data Protection Regulation (GDPR)</a> and will apply new data protection requirements in May 2018. </p>
<p>The principles in the EU GDPR were also evident in a presentation by technology and data protection law expert Berend van der Eijk, at a <a href="https://www.idea.or.id/berita/detail/diskusi-idea-dan-ict-watch-tentang-perlindungan-data-pribadi-di-era-digital">discussion</a> of Personal Data Protection in the Digital Era in Jakarta. He explained the transparency principle that citizens have a right to access, amend and occasionally remove their personal data from companies’ registers. Companies must also be upfront about why they collect personal data and how they’ll use it.</p>
<p><a href="https://www.oaic.gov.au/resources/agencies-and-organisations/business-resources/privacy-business-resource-21-australian-businesses-and-the-eu-general-data-protection-regulation.pdf">Existing personal data protection under the GDPR</a> on matters of race, ethnicity, politics, health, gender and sexuality continues to stand. </p>
<h2>Daily breaches of privacy</h2>
<p>This significantly contrasts with Indonesian practices. In Indonesia, <a href="http://www.thejakartapost.com/life/2017/11/15/hepatitis-patients-struggle-with-discrimination-in-workplace.html">health records data can and have been used to discriminate against individuals with HIV</a>. Some Indonesian companies have chosen not to hire people with the illness. This is <a href="https://www.cbsnews.com/news/life-expectancy-with-hiv-nears-normal-with-treatment/">despite HIV being an illness that people can now live</a> and work with for a nearly “normal” lifespan. </p>
<p>Another example of privacy breaches can be seen by checking the inbox of phone users in Indonesia. In Indonesia, businesses can easily send short message advertisements to millions of phone users based on their location. <a href="https://databoks.katadata.co.id/datapublish/2017/08/29/pengguna-ponsel-indonesia-mencapai-142-dari-populasi">There are 371.4 million registered phone users in Indonesia</a>, more than the total population of the country. The targeted ads through mobile phones violate privacy as providers never asked Indonesian phone users for their consent to give their data to third parties. </p>
<p>The government, too, <a href="https://nasional.kompas.com/read/2017/05/12/18590201/diduga.sebar.e-ktp.pendukung.ahok.mendagri.dinilai.langgar.6.peraturan.ini">can take advantage of data recording and use the information at its fingertips</a>. Indonesia has recently taken steps to centralise citizens’ data online <a href="http://elsam.or.id/2017/05/the-urgency-of-personal-data-protection-law/">by creating an electronic identification system</a>, e-KTP. But there is no regulation to govern Indonesians’ personal data on e-KTP.</p>
<h2>Good news?</h2>
<p>The good news is there are signs the Indonesian government is aware of this problem. </p>
<p>Donny Budi Utoyo, of the Ministry of Communication and Information Technology, said that civil society organisations and the <a href="http://www.thejakartapost.com/news/2018/01/21/government-expects-to-pass-data-protection-bill-in-2018.html">government</a> have tried to together to promote and push personal data protection law. Initiatives were established with the <a href="http://elsam.or.id/2017/05/kebutuhan-akan-uu-perlindungan-data-pribadi-kian-mendesak/">Institute for Community Studies & Advocacy</a>, <a href="https://www.idea.or.id/berita/detail/diskusi-idea-dan-ict-watch-tentang-perlindungan-data-pribadi-di-era-digital">the Indonesian E-Commerce Association</a> and ICT Watch. </p>
<p>Budi Utoyo was also concerned about patient autonomy with the rise of digitised public health records. In a public discussion, he asked: “Is there any right for Indonesians to ask Indonesian hospitals to remove or delete their medical records if they aren’t a patient?”</p>
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<p>However, he said that Indonesian data protection regulation is still an ongoing process as it requires harmonisation of other regulations by related government ministries in Indonesia. </p>
<h2>What next?</h2>
<p>Experts in all sectors must collaborate with the Indonesian government to push and create personal data protection law. This should protect citizens from having their data used without their consent or used to discriminate against them. </p>
<p>It is also worth noting that the law will have potential flow-on effects for the country’s economy. It would enable a safer business environment, in turn creating opportunities and investment for more Indonesian companies. </p>
<p>At the same time citizens also need to be educated about digital privacy in order to understand the potential risks and their right to protect it.</p><img src="https://counter.theconversation.com/content/91929/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fiona Suwana tidak bekerja, menjadi konsultan, memiliki saham, atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi selain yang telah disebut di atas.</span></em></p>Increased foreign investment in the digital economy means a national conversation is needed to ensure that citizens don’t get exploited.Fiona Suwana, PhD Candidate at Digital Media Research Centre and Research Assistant at Queensland University of Technology, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/826892017-09-26T10:30:00Z2017-09-26T10:30:00ZDrivers’ stories reveal how exploitation occurs in Gojek, Grab and Uber<p>Uber, Gojek and Grab have flooded the urban transportation market, branding themselves as middlemen between drivers and customers. Drivers are said to be <a href="http://www.bbc.com/news/business-36330006">“partners” or “micro-entrepreneurs”</a> who can decide how much money they want to make, any time they want. </p>
<p><a href="http://www.isrsf.org/files/download/442">My recent study</a>, however, reveals that such an image is at best misleading, at worst deceptive. I spent six months (November 2016-April 2017) analysing hundreds of testimonials from Indonesian drivers’ online forums on Facebook and Google+ with more than 80,000 members. In addition, I talked to ten drivers based in Jakarta, Semarang, Yogyakarta and Makassar in mid-2017.</p>
<p>I found that, rather than entering a partnership, drivers are entering an exploitative relationship in which they are treated as sweated labour with little to no working protection. </p>
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Baca juga:
<a href="https://theconversation.com/boom-in-indonesias-ride-hailing-services-leaves-drivers-in-uncertain-employment-75001">Boom in Indonesia's ride-hailing services leaves drivers in uncertain employment</a>
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<p>Using technology and rhetoric, ride-hailing companies manage to dictate to drivers while simultaneously creating the illusion of equal relations. Such a system has created discrepancies in access and power, which allow the company to intensify drivers’ labour while eliminating their rights as workers and shifting costs to them. </p>
<h2>Automated control</h2>
<p>It is true that drivers may decide to shut down the app at will. But the devil’s in the detail. Once logged in, the app heavily controls drivers – where they go, what order they take. Choice at work comes down to a matter of seconds; drivers have only about 10 seconds to choose “accept” or “reject” when an order is assigned to them.</p>
<p>Gojek, Grab and Uber impose a minimum daily acceptance rate to make drivers keep searching for orders. This decides whether drivers receive a daily bonus. As the actual rate for drivers (Rp1,000-2,000 or US$0.07-$0.14 per kilometre for motorcycle taxis) is not enough to be a living wage, most drivers now depend on this daily bonus. </p>
<p>Bonuses are given based on points. Longer distances and certain orders like food delivery are worth more points, but are also costlier as drivers must pay for petrol and parking. </p>
<p>The monetary value of points varies between companies. In Gojek, for instance, the <a href="https://driver.go-jek.com/hc/id/articles/235509348-Perhitungan-Point-dan-Bonus-Driver-GO-JEK-NON-JABODETABEK">maximum daily bonus is around Rp90,000</a> for motorbikes – and it keeps decreasing month to month. To cash in the bonus, drivers must reach a minimum 60-75% acceptance rate (the percentage of completed orders per orders assigned) and 4.5-star ratings.</p>
<p>Such a system resembles what I call “<a href="http://burawoy.berkeley.edu/Books/MC/Three.pdf">gamification of work</a>”. The firm sets earning goals that prod drivers into working longer and harder. Work is not only about giving a ride but also a math game of calculating performance. </p>
<p>Yet the rules of the game seem to be illogical. Often, their performance rating doesn’t increase even though they have completed orders. Conversely, when drivers fail to complete a task, it falls rapidly. </p>
<p>One driver that I interviewed expresses it this way: </p>
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<p>The performance is like rupiah: increase slowly but easy to fall freely.</p>
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<p>When drivers try to report these technical problems to the company, they get a standard reply that “it’s set by the system”. But it makes no sense to them that a machine can cheat. </p>
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<p>It must be people who cheat us.</p>
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<p>Bonuses as incentives work hand-in-hand with suspension as disincentives to discipline drivers. Suspension is one primary strategy to enforce drivers’ compliance. </p>
<p>Drivers cannot reject or cancel too many orders. If they do, they risk getting locked out from the app, temporarily or permanently.</p>
<p>For instance, Gojek has <a href="https://driver.go-jek.com/hc/id/articles/115000020907-Jenis-jenis-Pelanggaran-GO-JEK">a long list of rules</a> that will invoke suspension, which may lead to contract termination. </p>
<p><a href="https://metro.tempo.co/read/news/2017/02/17/064847641/gaji-ditahan-perusahaan-pengemudi-go-jek-lapor-polisi">Cases in Gojek</a> and <a href="https://www.cnnindonesia.com/teknologi/20170704120912-185-225623/ratusan-sopir-grabcar-demo-kembalikan-uang-kami/">Grab</a> show drivers cannot withdraw their money from their account when they are laid off. </p>
<h2>Illusion of “partnership”</h2>
<p>The companies disguise the practices of labour exploitation under the rhetoric of freedom, flexibility and partnership. The rhetoric relies upon the conventional idea of work — where employers own the production force and pay hourly wages. The fact that the companies only provide the app is overemphasised to maintain an impression that the <a href="https://m.tempo.co/read/news/2015/11/11/078717793/soal-kasus-go-jek-ini-pendapat-menaker-hanif-dhakiri">drivers are not employees</a>. </p>
<p>Far from being a neutral platform, the app creates a hierarchy of customers-middleman-drivers. The company is at the top of the power ladder. Meanwhile, <a href="https://hbr.org/2016/04/the-truth-about-how-ubers-app-manages-drivers">“customers act as managers”</a> as their ratings determine the drivers’ eligibility for bonuses. </p>
<p>While ratings can ensure service quality, customers’ ignorance can badly affect drivers. A friend of mine was reluctant to give five stars because she thinks perfection is only for God; while for the drivers, four is a failing grade. In case of dispute, the companies almost surely champions customers over drivers. An interviewee told me Grab suspended his friend for three days because a customer’s review had mistaken him for another driver.</p>
<p>The image of “micro-entrepreneur” compels drivers to use their own production force (vehicles) and cover their own costs for petrol, parking, maintenance, vehicle insurance and communication. </p>
<p>The more they work, the higher the expense and the greater the risks. </p>
<p>At the end, the company wields the upper hand in determining labour terms. After cutting drivers’ subsidy, the current manoeuvre is to regularly decrease the amount of bonus as well as increase the required performance. Labor terms are frequently changed to suit the company’s interests while mechanisms of negotiation are largely absent. </p>
<p>Drivers have tried to organise collective bargaining via protests. But, as of 2017, <a href="https://driver.go-jek.com/hc/id/articles/115000020907-Jenis-jenis-Pelanggaran-GO-JEK">the companies officially suspend drivers</a> who initiate, co-ordinate and join any form of demonstrations.</p>
<h2>Legal void</h2>
<p>Evidence in my research resonates with <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2686227">previous research</a> and <a href="https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html?_r=0">investigations</a> into Uber’s labour terms in the US, <a href="https://www.theguardian.com/technology/2016/dec/09/uber-drivers-report-sweated-labour-minimum-wage">the UK</a> and <a href="https://thewire.in/110022/factory-workers-uber-drivers-nature-exploitation-changed/">India</a>. Uber drivers have fought various legal battles in American and European courts to strive for their workers’ rights. </p>
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<p><em><strong>Read more</strong>: <a href="https://theconversation.com/ubers-100-million-settlement-with-drivers-settles-very-little-heres-why-58336">Uber’s $100 million settlement with drivers settles very little – here’s why</a></em></p>
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<p>In Indonesia, the middleman companies are under almost no legal constraints in exploiting workers. A new ministerial decree on ride-hailing services covers only technical aspects, such as price caps and vehicle requirements in online taxis. However, the Supreme Court recently annulled this regulation.</p>
<p>Existing labour law exposes ride-hailing drivers to a legal loophole. Current regulation of minimum wage and working hours has not addressed rights and entitlements that reflect the quasi-informal type of work in the ride-hailing industry. </p>
<p>The global patterns of exploitation highlight the importance of having regulations that keep up with new ways of working in the digital age. It is time we moved the debate forward to focus on drivers’ labour rights.</p><img src="https://counter.theconversation.com/content/82689/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aulia Nastiti receives funding from ISRSF (<a href="http://www.isrsf.org">www.isrsf.org</a>) as an Arryman fellow to conduct this research. She affiliates with the Arryman program at the EDGS, Buffett Institute, Northwestern University (<a href="http://www.edgs.northwestern.edu">www.edgs.northwestern.edu</a>). </span></em></p>Using technology and rhetoric, ride-hailing companies manage to dictate drivers while simultaneously creating the illusion of equal relation.Aulia Nastiti, Ph.D Student in Political Sciene, Northwestern UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/750012017-09-05T07:54:10Z2017-09-05T07:54:10ZBoom in Indonesia’s ride-hailing services leaves drivers in uncertain employment<p>The Indonesian government recently revised its regulation of the fast-growing on-line ride hailing services that had <a href="https://theconversation.com/uber-and-gojek-just-the-start-of-disruptive-innovation-in-indonesia-43644">disrupted the transportation business</a>. </p>
<p>Ride-hailing apps that connect motorcycle riders and car drivers with passengers through their mobiles have <a href="https://www.techinasia.com/public-transport-drivers-indonesia-protest-gojek-uber">provided cheaper and more convenient transport options for passengers</a>. But traditional drivers have protested against the new competition. </p>
<p>Under the new regulation, the government can now set a price cap on these services. Vehicles also are now subjected to minimum engine capacity and road worthiness. </p>
<p>These amendments attempt to ensure fair competition between ride hailing services and traditional transportation services. However, they have yet to address the impact of the growing number of freelance online drivers on job instability and insecurity. </p>
<h2>Creating work opportunity</h2>
<p>Between them, Gojek and Uber have at least 300,000 accounts registered as freelance drivers in Indonesia. </p>
<p>This number is significant and will likely continue to grow. Indonesia has around <a href="http://www.ilo.org/public/libdoc//igo/P/76333/76333(feb2015)267.pdf">120.85 million workers</a>, according to 2015 data.</p>
<p>Gojek and Grab started operating in Indonesia in 2011 and 2012 respectively. Gojek claims to have around <a href="http://www.pk-dl.com/gojek.com">250,000</a>. Uber entered Indonesia in 2014. In 2015 they announced that <a href="http://www.reuters.com/article/idUSJ9N13602C20151208">they plan to grow the numbers of drivers</a> from 12,000 to 100,000 in 2017. </p>
<p>According to a <a href="https://assets.documentcloud.org/documents/1507970/uberstudy.pdf">study conducted in 2015 on Uber drivers in the US</a>, drivers are attracted by the income opportunities and flexible working arrangements offered by online ride-hailing companies. </p>
<p>A 2015 study by the Malaysian-based Grab on their drivers in Indonesia highlighted <a href="https://www.grab.com/id/en/press/consumers-drivers/studi-menunjukkan-grab-mendorong-dampak-positif-para-penumpang-dan-mitra-pengemudinya/">Grab’s positive impacts on drivers</a>. The drivers could pay for their children’s school fees and have enough savings to buy a house from their income. Additionally, drivers of GrabCar rate work flexibility as the main benefit of joining the service. </p>
<h2>Unstable and insecure work</h2>
<p>But the work is not without its drawbacks. Drivers engaging in the online ride-sharing services are classified as independent contractors or working partners, not employees. This means drivers and their families have to <a href="http://heinonline.org/HOL/LandingPage?handle=hein.journals/cllpj37&div=40&id=&page=">cope-with work-related risks themselves</a>. </p>
<p>This classification <a href="http://www.go-ride.co.id/terms">frees companies</a> from the obligation to meet drivers’ minimum wage, pay overtime, and provide medical, retirement, and unemployment benefits. </p>
<p>Drivers who rely on online taxi as their main source of income are <a href="https://www.techinasia.com/gojek-evil-drivers-share-thoughts-improve">more affected by income instability</a>, than others who have other jobs.</p>
<p>Flexible working arrangements also expose drivers to other risks, as they are prone to <a href="http://onlinelibrary.wiley.com/doi/10.1111/cccr.12157/full">working over time</a>, often in unusual hours, to maximise incomes. </p>
<h2>Informal sector</h2>
<p>This insecurity and instability are similar <a href="http://abs.sagepub.com/content/early/2012/12/04/0002764212466236">to the experience of workers in the informal sector</a>, such as market coolies, domestic workers, and regular <em>ojek</em> (motorcycle taxi) drivers. </p>
<p>Online taxi drivers also share the experience of formal sectors workers who are impacted by the process of casualisation, <a href="http://abs.sagepub.com/content/early/2012/12/04/0002764212466236">through arrangement like outsourcing and short-term contracting</a>. </p>
<p>In many countries in Asia, <a href="https://kevinhewison.files.wordpress.com/2011/02/kalleberg-and-hewison-2015.pdf">insecure employment practices</a> have long been the “standard” due to the pervasiveness of the informal sector and the failure of the formal sector to create more permanent jobs. </p>
<p>This work-related insecurity and instability are also part of a global trend of <a href="http://www.ilo.org/wcmsp5/groups/public/---ed_protect/---protrav/---travail/documents/publication/wcms_443267.pdf">increased casualisation of labor</a>. </p>
<p>The trend is connected to the expansion of neo-liberalism, a set of ideas and policies associated with economic liberalism, which favours free market competition. </p>
<p><a href="https://www.amazon.com/Precariat-New-Dangerous-Class/dp/1472536169">These changes</a> have promoted flexible labour policies, dismantled the welfare state where it existed, and reduced the access of the world’s poorest people to various social services.</p>
<h2>Impact of work insecurity and instability</h2>
<p><a href="http://journals.sagepub.com/doi/abs/10.1177/000312240907400101">Research shows</a> that work-related insecurity and instability affect workers physically, psychologically and morally. </p>
<p>Work insecurity and instability increase stress and lead to poor health. They also degrade relationships with family and community members. </p>
<p>Furthermore, workers who experience insecurity and instability are <a href="http://www.tandfonline.com/doi/abs/10.1080/00472336.2016.1197959">prone to fall for populist politicians</a> who often use ethnic and religious rhetoric to draw support. Having inadequate means to voice their aspirations, they can easily be lured to listen to voices that contribute to divisions. </p>
<h2>Improve workers protection</h2>
<p>The government, companies, labour unions and other elements of civil society need to reconsider the meaning of work and labour relations in the IT-facilitated economy, and their impact on workers. </p>
<p>A set of strategies may be needed to unite drivers in ride-hailing service and establish a channel to voice their aspirations as workers. It needs to consider the flexible working arrangement in the IT-facilitated economy as different from conventional jobs.</p>
<p>It is also important to reconsider the classification of drivers as independent contractors. Drivers in the US, UK and Canada have launched lawsuits against Uber, arguing that they should be classified as employees rather than independent contractors. These lawsuits have <a href="http://business.financialpost.com/news/transportation/uber-drivers-are-employees-not-contractors-canadian-lawsuit-argues">resulted in mixed results</a>. Some judges find that drivers with Uber are employees. But a private arbitrator in California rules that Uber drivers are contractors, not emploees. </p>
<p>Online ride-hailing services may have provided important income opportunity for drivers. But, the services create precarious employment for drivers, and that needs to be addressed.</p><img src="https://counter.theconversation.com/content/75001/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Diatyka Widya Permata Yasih tidak bekerja, menjadi konsultan, memiliki saham, atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi selain yang telah disebut di atas.</span></em></p>Indonesia revised a regulation on ride-hailing services to ensure fair competition. But the government has yet to address the job insecurity issues that drivers face.Diatyka Widya Permata Yasih, Lecturer, Department of Sociology, Universitas IndonesiaLicensed as Creative Commons – attribution, no derivatives.