When UK-based food delivery platform Deliveroo announced it would pull out of Spain over changes to the legal status of gig economy workers, it highlighted an ongoing debate over the legal classification of these workers. For companies like Deliveroo and Uber, whose business model is entrenched in the gig economy, these workers are self-employed, relieving the company from providing annual leave, sick pay or medical insurance. European regulators however, are beginning to intervene and several have ruled that gig workers are not self-employed, but rather employees of the companies that hire them and are therefore entitled to employment benefits.
In the Middle East, the gig economy has facilitated a transformational wave where high-growth tech verticals like last-mile delivery, are becoming wholly dependent on short-term gig work models. In Saudi Arabia, the movement is intensified by large amounts of venture capital being invested in gig work platforms like Sabbar and Marn as government initiatives and organisations try to roll out clearer regulations and easier guidelines.
One of these organisations is Future Work, a government-owned company that was established in 2019 and which operates directly under the Ministry of Human Resources and Development to act as a mediator between national regulatory bodies and gig work initiatives to accelerate the adoption of a gig economy in the Saudi market.
We spoke to Bandar AlMohamadi, CEO and board member at Future Work about the emerging gig economy in the region and how gig work startups and national organisations are fuelling the wave.
When you see a market like Saudi Arabia, what makes you believe that it is time to open it to a gig work model?
We don’t need to open the market or ‘set the stage’ for the adoption of gig work, the market is already there. We have around one to two thousand active registered Saudis on a single gig work platform, and it’s part of a global movement as well.
There is already the mindset to encourage gig work in Saudi Arabia without jeopardising the economics behind the market. We want to keep the market open and dynamic, which is crucial to grow a shared economy or a gig work space for future generations.
What is your current focus at Future Work?
Our role in Future Work is to be the catalyst for the Saudi government to activate the use of gig workers and talent under the concept of gig and shared economies. So, we are trying to penetrate the Saudi market and cause the paradigm shift that was supposed to happen in the mindsets of companies by showing them that hiring gig workers and freelancers can be a way to resource leveling.
For us in Saudi Arabia today, our focus is on the job seeker. We want to save those who are skillful and open to work opportunities. We want to make sure that by 50 or 60 years old, gig workers and freelancers will be able to have a pension or retirement plan, that they have certain protections, so it’s crucial as a country to build standards and minimum requirements that everyone will be adhering to.
How is gig work currently being regulated?
The Ministry of Transportation is responsible for companies like Uber and Careem, for example, while the Ministry of Telecommunications is responsible for Hungerstation or Jahez. These platforms are connected to government platforms that own the regulatory bodies, so we have platforms like Matloob to manage gig workers under the Ministry of Entertainment.
We work with these platforms to address the gaps in the regulations and try to lobby on the behalf of the market and those benefiting from it to adopt the regulations that would ensure that this market is growing and creating more jobs.
How do you balance between Saudisation and “borderless” on-demand work?
It is a challenge, your market is open to the world when it is digital and borderless, and the market plays the role as the mediator to connect talent across borders so there will be job opportunities hunted by non-Saudi gig workers.
The key is to educate companies that they don’t need to have this far geographic reach to access talent and can instead work with a Saudi gig worker who will also be able to deliver what you are looking for.
There are also initiatives currently being developed to try to ‘export’ the Saudi gig talent, so gig workers can work for any company outside of Saudi Arabia, and this is a huge opportunity to grow our talent as well as a GDP contributor.
What are some key challenges today?
The main challenges are data, regulation, and mindsets or cultural perceptions. The government is working to provide the protections for the gig workers who now no longer have security because it's not an ‘employee-employer’ relationship anymore, it’s now a ‘client-service provider’ relationship. It’s a global struggle today, but by making gig work stable and secure, this makes it more attractive for people to participate in.
We are trying to resolve the fragmentation that is currently there because of these challenges and we hope that the private sector does its part in contributing. Gig work platforms need to work alongside regulators to achieve the stability and social protection that we need.
Do you see gig work startups driving the movement towards a gig economy?
When it comes to gig work startups, the more we have the better. When service providers enter the market, they tend to provide different offerings and different dynamics and business models, and so some will succeed and others might not. At the end of the day, this creates a mature market, and this maturity is what the telecom industry has gone through at the beginning.
The more players you have in an industry, the more enriching the outcome will be on the wider national and global scale.