Gig work in Georgia JAMnews

Gig work in Georgia

history of
Ben Wray
Maradia Tsaava

Photo: Polina Malilo/Unsplash

The story of Giorgi Tikaradze, a 36-year-old food courier in Tbilisi, reflects the push and pull factors that drive Georgians to work in the gig economy. “Before I became a courier, I worked as a bartender for many years,” he says. “It was hell, but from then on I ended up in a different hell.”

Tikaradze started working at Wolt, a Finnish food delivery platform, in 2020. Long working hours, stagnant wages and Wolt's lack of responsiveness led Tikaradze to join a high-profile strike that lasted from February to April last year.

“I had an accident before the strike and couldn't work,” he says. “After the strike, Wolt locked me out of the system.” Tikaradze is not the only courier to suffer this fate. Other drivers who took part in the strike also had their accounts deactivated by Wolt.

Some of the drivers filed a discrimination complaint with the Ombudsman, which was successful. The Ombudsman recommended that Wolt reinstate the workers. However, the recommendation was not binding and Wolt ignored it.

When asked about this incident, Natalia Jaliashvili, Public Policy Manager at Wolt, said: “Courier partners who were excluded from our platform violated the partnership agreement with Wolt. Each courier partner received a detailed explanation with the reasons for their departure.”

The case is indicative of the power imbalance between gig workers and the digital labor platforms they work for in Georgia. With the state either unwilling or unable to take action and unemployment at 17%, platforms like Wolt have a lot of leeway to act as they please.

Georgia’s non-existent workers’ rights

Tikaradze moved to one of Wolt's main competitors, Glovo, but discovered “the same hell” there. Still, he has no plans to give up his work in the gig economy.

“If I work continuously, I still earn more money than in a regular job, where the salary is about 1200 lari per month. [just over 400 Euros]”, he says. “Here I can earn 100 lari a day if I complete 40 orders in 12 hours.”

Tikaradze and other Georgian gig workers we spoke to described similar problems to those faced by couriers in the West, including long hours, unfair takedowns and dangerous work. The difference in Georgia, however, is that wages in the broader labor market are often lower than in the gig economy. The minimum wage is virtually nonexistent and workers' rights are weak and rarely enforced.

“Even standard jobs are precarious in Georgia,” says Ana Diakonidze, a sociologist at Tbilisi State University and an expert on platform work. “I interviewed people in standard jobs who haven't had a vacation in four years. So of course these workers don't find gig work problematic, quite the opposite.”

In addition, self-employed people in Georgia pay a maximum of one percent of taxes on their income, while employees pay only 20 percent. This explains why there is little desire among gig workers in Georgia to advocate for workers' rights, despite both the Public Ombudsman and the Labor Inspectorate having established that an employment relationship exists.

There seems to be a practical consensus among actors in Georgia not to cause unrest on the issue of the employment status of gig workers – a totemic issue in the European Union.

“The key battleground in the gig economy in developed countries is the status of the worker: is he or she an employee or an independent contractor,” says Vako Natsvlishvili, a lecturer at Tbilisi State University and a labor law researcher. “In Georgia, labor law does not protect the rights of those already in the system. Therefore, there is no desire among gig workers to fight for employment status.”

The sliding doors of platform capitalism in Georgia

However, the unique position of gig workers in the overall Georgian labor market has not prevented more and more disputes within Georgia's gig economy as wages fall while the cost of living continues to rise. The most recent strike took place in January, when the Estonian multimodal platform reportedly increased its commission on each ride from 10 percent to 23.6 percent – a claim Bolt dismissed, saying it had addressed the striking drivers' demands “point by point.”

Bolt driver. Photo: Ilia Ratiani/RFER/RL

Georgia's gig workers are trapped in the sliding doors of Western platform capitalism. Business models in the gig economy have undergone rapid change since 2022, when inflation rose and interest rates began to rise. The increased cost of money made financial investors increasingly skeptical about putting money into food delivery and taxi platforms, which have almost all posted losses since their launch about a decade ago.

“It's clear that the market is undergoing a radical transformation and we need to respond accordingly,” Uber CEO Dara Khosrowshahi told employees in a leaked email in May 2022, adding, “We need to show them, to quote Jerry Maguire, the money.”

China and Georgia

This “tech downturn” has caused all digital employment platforms to move away from growth-before-profit strategies and towards more financially sustainable models. So far, only Uber has been able to make a profit, but all platforms have tried to increase their revenue primarily by squeezing their workers.

When Wolt entered the Georgian market in 2018, it was still in the growth phase before making profits. Money was cheap and the company subsidized deliveries to gain market share at the expense of competitors.

But in early 2023, Wolt changed course completely. As part of a Europe-wide initiative to reduce labor costs, the company cut the wages of its drivers in Georgia, which led to strikes not only in Georgia but also in at least seven other European countries. This international strike movement was accompanied on social media with the hashtag “#ReWolt.”

When these global players tighten their belts, it is the drivers and riders who suffer. A study published in March by Fairwork, a research project at the University of Oxford on the gig economy, found that both Wolt and Glovo met only four out of ten criteria for minimum standards of fairness towards their workers. Taxi platforms Bolt and the Russian platform Yandex (in which Uber had a stake until last year) met only one out of ten criteria.

“Unfortunately, it appears that the platforms have not yet taken any substantive action to address the myriad challenges faced by their workers,” the Fairwork study concludes.

Asked about the Fairwork study, Jaliashvili said Wolt had organised a company survey which found that “the majority of our partners are satisfied with their cooperation with us”. Bolt said it did not participate in the Fairwork study because it did not believe it could “reflect all the specifics of each company”, while a spokesperson for Glovo said it worked closely with Fairwork and “recognised that there is room for growth”.

Could Georgia adopt EU regulation on the gig economy?

While foreign investment in digital labor platforms in Georgia may bring new challenges for workers, it also offers the opportunity for new, better-paying jobs.

An article published in February by Georgian economists Murtaz Kvirkvaia and Mogeli Shengelia argues that platforms should be welcomed in Georgia as they can help “reduce unemployment and create additional sources of income for the working population.”

Georgia has a fairly developed digital infrastructure, and Kvirkvaia and Shengelia also point to remote work platforms such as Freelancer, Upwork, Fiver and Guru as examples of where Georgians can reliably do gig work from home. But while cloud work platforms also offer opportunities that were previously unavailable to Georgian workers, they offer even fewer opportunities for worker organization and access to labor rights than food delivery workers and taxi drivers.

Salome Shubladze, director of the Social Policy Programme at the Georgian Centre for Social Justice, does not believe that the potential of digital labour platforms to create jobs outweighs the risks to workers' rights in Georgia. In her view, regulations are necessary to offset these risks: “It is not about whether the platforms are good or bad, but about how they work in Georgia. We know that these companies will be here, but if the EU can regulate platform work, then this work can be regulated here too.”

On March 11, the European Union approved the Platform Work Directive, which establishes a legal presumption of employment of workers in the platform economy in all 27 EU member states, as well as a set of new workers' rights related to the management of algorithms. Last year, Georgia was officially granted EU candidate status, putting the country in the spotlight for potential membership.

Shubladze, who previously worked as a lawyer for the Georgian government, believes that the EU directive on platform work could finally encourage Georgian politicians to take action on regulating platform work.

“Previous labor market reforms in Georgia always happened through lobbying the EU,” she says. “Now Georgia has candidate status, and in this context there could be reform impulses in this area. But it always takes at least a few years after the EU has taken action before there is any movement in Georgian politics.”

The gig economy has brought much-needed opportunities to a country that desperately needs them, but as the business model of these global platforms changes, the costs of all-powerful corporations are starting to become clear. Whether or not Georgia follows the EU's platform work directive, regulations will be needed to curb the excesses of the gig economy.

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This article was published as part of the project “Spheres of Influence Uncovered” conducted by n-ost.

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