Between Platforms and Protection: Social Security Gaps and Inclusive Prosperity for Indonesian Ride-Hailing Drivers

Abstract

In Indonesia, The World Bank Gini Inequality Index (2025) suggest progress in reducing inequality (39% to 35%, 2014-2024). The National Statistics Bureau (BPS) (2025) reports the lowest level of unemployment since post-pandemic era as per February 2025 at 4.76%. However, recent four-day nationwide protests in August-September 2025 triggered by the increase in compensation of lawmakers (later rescinded) marked a perception of increasing inequality on the ground. A 2024 Kantar report estimated that 59% of the Indonesian workforce is informal, of which 50% are gig workers. The majority representation of informal workers, and the significant representation of gig workers therein, suggests that gig workers are a key driver of Indonesian economy. While formally working on digital platforms, their position as informal workers limits access to mandatory employment benefits. This study evaluates the paradox between prosperity and perceived inequality using the three pillars of inclusive prosperity framework (Acemoglu & Robinson, 2013; Acemoglu, 2019) based on existing quantitative survey data collected from Indonesian motorbike gig workers (Brailovskaya et al. 2024a, 2024b; N=3,502 active, inactive, and offline drivers). For the first pillar, Economic Growth and Improved Living Standards, I compare incomes between active and offline drivers to assess whether platform work improves livelihoods or exposes hidden vulnerabilities. For the second pillar, Economic Opportunities and Good Jobs, I examine drivers’ exit opportunities and motivations, including for inactive drivers, to evaluate whether gig work translates into economic opportunities or locks workers into informality without protection. For the third pillar, Institutions and Technology to Enable Opportunities, I quantify barriers in social protection participation rate, formal union participation, and gender equality, revealing the institutional shortcomings that limit access to protection. Findings highlight the gap between the ideal narrative of digital platforms as opportunity providers and the reality of limited social protection, offering implications for more inclusive policy design.