Reforming Gig Economy in Indonesia: A Sustainable Model to Support 8% Economic Growth

Abstract

The gig economy in Indonesia is growing rapidly with the rise of digital platforms offering flexible work. However, this growth is not supported by adequate regulations, leading to unclear worker status, lack of social security, and income uncertainty. This study uses a qualitative approach by analyzing literature, regulations, and data from BPJS Ketenagakerjaan, the World Bank, and the ILO. Case studies from countries like Spain and the UK are also examined to evaluate existing regulatory models. The findings show that most gig workers in Indonesia lack labor protection, including social security and stable wages. Platform algorithms that determine worker earnings are often non-transparent, increasing economic instability for gig workers. To address these issues, this study proposes a hybrid regulatory model that balances work flexibility with worker protection. The model includes a contribution-based social security scheme, algorithm transparency in payment systems, and incentives for digital platforms to register gig workers in welfare programs. This approach has been successfully implemented in several countries, improving worker welfare without reducing work flexibility. By adopting this mechanism, Indonesia can create a more sustainable and inclusive gig economy while ensuring this sector contributes to the national economic growth target of 8%.