The Employment Status of Gig Workers in Indonesia’s Transition to Green Jobs: A Reform Agenda for Decent Work

  • 25/07/2025
  • Category: Commentaries ID
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Penulis: Intan Annisa Putri
Editor: Bangkit Adhi Wiguna

The gig economy is a platform-based economy model that leverages the internet, emphasising each individual’s capacity to generate income while enjoying the freedom to arrange schedules and choose work locations.1 According to an analysis by Oxford Economics, the on-demand services sector, including transport and delivery, contributed approximately IDR 91.7 trillion to Indonesia’s GDP in 2023.2 This model now accounts for 18 per cent of the labour force, employing roughly 24 million workers.3 However, debate has emerged over the deepening informalisation of labour resulting from the platformisation of the gig economy, heightening concerns that informal employment will become more entrenched. Indonesia already has 84.1 million informal workers, representing 59.1 per cent of the total labour force.4 The gig economy, which is leading to informalization, is considered to be exacerbating the informalization of workers in Indonesia because workers wages are very volatile, workers’ status is unclear, and there is minimal protection of work rights.5

The phenomenon of the gig economy’s expansion has advanced in tandem with Indonesia’s ambition to cultivate green jobs which contribute substantively to environmental sustainability. According to the United Nations Environment Programme (UNEP), green jobs cannot be circumscribed merely by their eco-friendly character. Rather, they must also conform to the normative standards of decent work, encompassing adequate remuneration, safe and healthful working conditions, and full respect for workers’ rights.6 These normative principles collide with the escalating informalisation of the labour market, a trajectory to which the platform-based gig economy, as an increasingly dominant economic modality, markedly contributes. Consequently, a critical question arises: to what extent can Indonesia’s nascent green-jobs agenda negotiate with, or indeed ameliorate, this entrenched phenomenon of labour-market informalisation?

The author elects to foreground the gig economy as the primary object of analysis because this sector is undergoing exceptionally rapid expansion, particularly within Indonesia. An array of scholarly projections contends that the gig economy will serve as a principal bulwark of the future national economy. Such projections imply that a substantial share of the labour force is likely to migrate into gig work, culminating in a higher proportion of informal workers across the country. Accordingly, the author will dissect the informal labour relations embedded in ride-hailing platforms, one of the most ubiquitous instantiations of the gig economy in Indonesia. Thereafter, the author will scrutinise the measures that could be undertaken to advance the formalisation of labour relations within these platforms.

Patterns of Labour Relations within Indonesia’s Green-Jobs Sector

Labour relations in the green-jobs sector are governed by the normative framework articulated in the International Labour Organization’s Just Transition Guidelines (2015). Foremost among these prescriptions is the protection of fundamental rights at work. In consequence, every purportedly “green” occupation must conform to the ILO’s four cardinal pillars of decent work, namely, freedom of association, collective bargaining, the abolition of forced and child labour, and non-discrimination. These rights constitute an indispensable foundation that must be satisfied prior to conferring the “green” label upon any form of employment.7 The purpose of such stringency is to pre-empt labour-related greenwashing, an ostensibly sustainable activity. For example, the installation of wind-turbine infrastructure by contract labourers who lack occupational safety and health safeguards (Keselamatan dan Kesehatan Kerja, K3) or a living wage, cannot legitimately be classified as a green job when the workers concerned are deprived of fundamental employment guarantees, including permanent status and adequate wage.

The labour-relations spectrum within Indonesia’s green-jobs landscape is remarkably diverse. At the formal end, green employment practices are observable in the manufacturing industry, for example, the PT Trina Mas Agra solar-cell and module plant in Kendal Industrial Park, which boasts an annual capacity of 1 GW.8 Labour relations in such green-energy manufacturing firms typically encompass the recruitment of technicians through rigorous selection procedures, wages pegged to the local minimum wage, permanent contracts, union protection, and elevated occupational-safety standards.9 Collectively, these elements generate income security, defined career pathways, and space for collective bargaining, factors that the International Labour Organization (ILO) identifies as prerequisites for decent work. Nevertheless, consistent compliance with safety standards, continuous upskilling, and transparency throughout the supply chain must still be audited to ensure that the expansion of renewable energy is not merely environmentally benign but also consonant with the ILO’s decent-work principles, which hinge on the protection of fundamental labour rights.

A semi-formal stratum is illustrated by certified installers of heating, ventilation, and air-conditioning (HVAC) systems and electricians engaged in energy-efficient building retrofits. Such certified tradespeople, although generally registered with Indonesia’s Social Security Administration for Employment (BPJS Ketenagakerjaan) and having completed technical training, are remunerated on a piece-rate basis per project, rendering their income streams contingent upon the timely acquisition of subsequent contracts.10 Consequently, despite enjoying rudimentary social-protection coverage, they remain vulnerable in respect of wage stability and access to financing for advanced training, challenges that complicate the design of transition-financing schemes for green jobs. One alternative involves low-interest credit facilities administered by Indonesia’s Environment Fund Management Agency (Badan Pengelola Dana Lingkungan Hidup, BPDLH) in collaboration with the United Nations Development Programme (UNDP). The programme enables semi-formal workers to secure affordable loans for procuring eco-friendly tools and materials while also providing business training and fostering a green-credit track record.11 Such mechanisms help semi-formal workers adapt to increasingly sophisticated green-building technologies without becoming ensnared in a cycle of short-term project dependence.

At the informal sector, green-job practices can be seen among Gojek and Grab ride-hailing drivers who have adopted electric motorcycles since 2019 to accelerate the uptake of environmentally friendly two-wheelers.12 These drivers are paid per trip, receive no social-security benefits, and must absorb the risks associated with demand fluctuations and battery-maintenance costs.13 Similarly, recycling platforms such as Octopus remunerate partner waste-bank collectors on a per-kilogram basis, allowing them to exchange accumulated weights for vouchers.14 Because Octopus partners are drawn from the wider civilian population, no formal contracts or labour relations exist between the platform and the collectors, they engage voluntarily, and therefore enjoy no guaranteed fundamental labour rights.15 Admittedly, such gig-work arrangements contribute to emission-reduction goals. GoTo’s 2024 Sustainability Report notes a 1.17 per cent year-on-year decrease in fleet emission intensity per kilometre after Gojek’s electric-vehicle fleet grew by 300 per cent,16 while the World Economic Forum (2021) reports that 9,000 scavenger-preservers using the Octopus app experienced a tenfold rise in income, owing to direct access to recycling plants and transparent price setting.17 Nonetheless, these jobs deepen worker vulnerability, as the capital burden, from electric-vehicle loan instalments to personal protective equipment, falls entirely on the partners themselves.

Labour relations within Indonesia’s green-jobs sector have yet to conform fully to the decent-work standards for environmentally sustainable employment set forth by the International Labour Organization. Numerous green occupations operate in the informal economy, depriving workers of the safeguards that those standards require. Likewise, semi-formal sector of green jobs, although accompanied by formal certification, remain contract-based and therefore provide no assurance of stable wages. Consequently, the imperative of robust worker protection retains its salience at every stage of the transition toward a greener labour market.

Scenario for Gig Workers’ Transition into Green Jobs to Achieve Decent Work

To facilitate Indonesia’s shift toward a green economy, gig workers need not remain imprisoned by the labour market’s hyper-flexible regime. Rather, the Government could prioritise a transition framework that reallocates gig labour into green jobs offering a markedly higher degree of decent work. This transformation demands an institutional architecture that tangibly elevates workers’ status. The scenario outlined below employs platform-based ride-hailing, exemplified by Gojek and Grab, as its illustrative case.

First, adopting a Presumption of Employment. The presumption of employment is a regulatory doctrine developed in the European Union to govern platform labour. Under this regime, each application-based worker is legally presumed to be an employee, not an “independent partner,” thereby gaining statutory rights to the minimum wage, social-security benefits, and collective bargaining.18 Indonesia could introduce an analogous policy, with context-specific safeguards, to secure the fundamental labour rights of ride-hailing drivers. Ride-hailing platforms such as Gojek already gesture toward green employment through the deployment of electric motorcycles that curb drivers’ daily fuel costs.19 To safeguard and indeed enhance the labour conditions within this emergent green sector, an EU-style presumption of employment would ensure that every ride-hailing worker enjoys the fundamental protections mandated by the International Labour Organization (ILO).

Second, reskilling into Electric-Vehicle (EV) technical occupations. Ride-hailing drivers could be channelled into certified training in high-voltage systems, battery diagnostics, and software calibration, positioning them to apply for posts in authorised service centres or battery plants. Indonesia’s National Occupational Competency Standard (Standar Kompetensi Kerja Nasional Indonesia, SKKNI) No. 8/2024 delineates twenty-one high-voltage competency units, ranging from battery diagnostics to ECU flashing.20 Upon certification, former ride-hailing workers may secure positions in authorised workshops, where earnings in the range of IDR 3.75–5.38 million per month approximate Jakarta’s 2025 provincial minimum wage (IDR 5.39 million) and surpass the minimum wages of West Java (IDR 2.19 million) and Central Java (IDR 2.16 million).21

Third, creating ride-hailing cooperatives. Ride-hailing drivers who, under a presumption of employment regime, are legally recognised as employees could establish a cooperative in which each member contributes IDR 1-2 million in basic share capital. The cooperative would then offer two financing modalities for acquiring electric motorcycles from approved suppliers: (a) an outright-purchase scheme funded through down-payments and bank credit, or (b) a two-year hire-purchase arrangement with a daily rental fee. Either option can reduce fuel expenditures by roughly IDR 50–70 thousand per day.22 Because a cooperative constitutes a formal business entity, it is entitled to bargain collectively for wholesale electricity tariffs, spare parts, and insurance premiums. A comparable model is already operative in New York, where The Drivers Cooperative allows drivers to be both owners and workers, setting fares above the benchmarks imposed by Uber and Lyft.23 If Indonesian ride-hailing drivers formed a similar entity, they could negotiate wholesale fuel contracts, fleet-maintenance services, and group insurance, distributing the resulting cost savings directly to members.

Last, integrating gig workers into a digital labour exchange. On 10 June 2025, the Indonesian Government and the United Nations launched a US$ 3.15 million programme under the Global Accelerator on Jobs and Social Protection for Just Transitions.24 The initiative established an online green-jobs exchange that consolidates informal-labour registration, skills upgrading, job placement, and portable social security in a single digital ecosystem. The workflow begins with one-time registration using the National Identity Number. Once a gig worker signs in via smartphone, the system cross-checks the civil-registry database and links the user to an existing BPJS-Employment account. Because social-protection entitlements are now anchored to the individual’s identity, BPJS contributions and benefits remain uninterrupted even when the worker shifts projects. The portal then administers a brief skills assessment and clusters workers accordingly. If competency gaps emerge, the system automatically issues training vouchers financed by the Accelerator. Employers, including those in the green-jobs sector, are obliged to list vacancies specifying wages at or above the local minimum wage, contract duration, occupational-safety standards, and BPJS coverage. In this sense, the digital exchange functions as an auxiliary mechanism for extending fundamental labour rights to ride-hailing drivers. Nevertheless, the Government must still prioritise the formalisation of drivers’ employment status to rectify underlying vulnerabilities.

Conclusion

The gig economy does add value to the national economy and support the transition to green jobs, but informal partnership patterns actually increase the number of workers without wage certainty and social protection. In order for the ambition of the transition to green jobs to be truly aligned with the decent work agenda, the government needs to (1) implement a presumption of employment policy so that drivers are recognized as employees with the right to a minimum wage, work accident insurance, and collective bargaining space; (2) open a certified retraining path for electric vehicles so that ride-hailing drivers can migrate to become technicians with a more stable income; (3) encourage the formation of driver cooperatives that serve as legal worker forums so that they can collectively negotiate energy, spare parts, and insurance rates; and (4) integrate workers into a digital job market that links population registration numbers with social security protection. This integrated policy package ensures that the transition to green jobs is not simply about replacing gasoline-powered vehicles with electric vehicles, but truly elevates workers into decent work and sustainable industrial relations.

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