Living the Gig Dream in Africa

Why Africa is the next frontier of gig work 📱

July 28, 2022

Welcome to Prox Weekly #6!

In case you’re new here, this newsletter will get you smarter on Africa’s tech scene in under 5 minutes. Maybe 7 if you’re a slow reader 🐢

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This is Part 1 of The Gig Dream Series.

In the series, we will look at the gig economy, how it exists in Africa and what it could mean for Africa’s young unemployed population.

Heads up - say ‘gig’ a lot in this article - 29 times to be exact. I think it’s my new favourite word.

Work has transformed in the last 12 years.

In 2010, the idea of being able to wake up, get into your car, complete tasks then sign off whenever you like sounded like fantasy.

Now, that’s a reality for 50 million people who work in the Gig Economy.

What is the gig economy? A platform connects you to customers and job opportunities - like a passenger who needs to get from A to B, or a guest who needs a room to stay in.

You complete these tasks and get paid by the platform for each task.

Gig Pros and Gig Cons

Gig work is easy to jump into - to start, you just need to be able to drive a car, use your skills, or share your living space.

You can choose when you jump on and off the platform, which means you can work as much or as little as you like.

And money hits your bank account quickly for the work that you do. No waiting for monthly salaries, money is in your account in weeks, or even right after each job.

But, there are some gig cons. At the cost of more flexibility, you miss a few features of traditional jobs.

You are responsible for the costs of your asset (whether thats a car, your skills, or your house).

Same goes for everything related to that asset - things like fuel, cleaning and insurance.

And your safety is your own responsibility.

These cons of gig work have hurt the reputation of gig platforms, like Uber and Lyft, who have been taken to court for not offering full employee protections.

But looking at where the gig economy is headed next, there could be more pros than cons coming out of gig platforms.

Gig platforms are verbs

I was convinced of Uber’s domination when rapper, MadeinTyo, released the song Uber Everywhere in 2015.

 ‘Uber f*cking everywhere, aye, yeah’ - MadeinTYO

Average song, but strong message

Uber is now a verb.

And you don’t find a hotel room anymore, you find an Airbnb.

Gig platforms have effectively penetrated developed markets. Their next challenge in these markets is domination against rival platforms.

It’s the classic ‘are we getting an Uber or a Didi’ question you hear whenever you need to get to the other side of town. (Didi always for me, it’s cheaper 💁🏾‍♂️).

So, what’s next for these platforms?

Emerging markets are up next

We’re seeing this with Uber aggressively expanding in India, Latin America and buying stakes in other platforms - like Grab and Didi, which dominate South East Asian and China respectively.

And the next leg of Gig Work expansion is coming for Africa.

In the last 10 years, hundreds of platforms using the gig work model have launched in the continent.

From the global players we all know and love - like Bolt, Uber, Glovo - and newer, local players like Lynk, Gozem, Ride, Sendy, and TruQ.

And while gig platforms have questionable reputations in developed markets, the case for these platforms in Africa is compelling.

Gig work’s promise for Africa

Africa has a population of 420m people between 18-35 and the highest rate of unemployment globally.

According to African Development Bank, only 15% of Africa’s young population are in wage employment.

31% work informally - this could look like running a market stall, or working adhoc jobs at a cafe. These workers are seen to be ‘economically vulnerable,’ and generally lack sufficient savings, and may be living day to day.

19% are inactive - meaning they are not seeking work or are unable to work. They may be studying or attending school.

The remaining 35% are unemployed.

The same research shows that while 10-12 million youth enter Africa’s workforce each year, only 3 million jobs are created annually.

On a continent with little to no social protection, Africa’s youth have no choice but to find work.

In Ethiopia, it’s normal to have a qualified physiotherapist drive your taxi because there aren't enough jobs in the field.

And unemployment in Africa doesn’t just hurt job seekers, it hurts stability.

Historically, we see how low employment rates next to higher prices of living can be the catalyst for large-scale political instability and conflict.

In short: we need more jobs in Africa.

And, the gig economy has the potential to be a solution to large-scale unemployment.

Sunday to Sunday

Ashenafi, a driver from Ethiopia, has two bachelors degrees in Nursing and Public Health.

But he’s driver. Why?

He sums it up perfectly:

‘I can make as much in a week driving as I could in a month working in the health sector. But, I have to work Sunday to Sunday.’

It’s hard work, but it pays better than most jobs with higher cost entry points.

Looking at the data points from Rest of World’s analysis, we see that drivers earnings can just over, or well ahead of the average wage.

Gig work is not just a career path - it’s actually a means to an end.

Only 40% of delivery workers and drivers across Africa only see themselves staying in their jobs for the next year. Most want to move onto their next career or business.

Gig work is a way to earn money to eventually work another job, or start your own business.

Gig work could be a way to solve job vulnerability for Africa’s young population. But it’s not all champagne and flowers.

In the next edition of The Gig Dream, we’ll be talking to Kayode, Ex-Jumia Country Manager and CEO of Gigmile, about realities for gig workers and platforms on the continent.

Did you learn something new about the Gig Economy? Want to share your thoughts?

Continue the conversation below on LinkedIn or Twitter, or let me know what you think over email.

And if you enjoyed this and know someone else who might please share it over 🙏🏾

Catch you next week!