Digital Exploitation in the Gig Economy: An Analysis of Indonesian Labor LawBased on Karl Marx’s Exploitation Theory and Pancasila Industrial Relations

Abstract

Digital transformation in Indonesia has generated the rise of the gig economy, a work model mediated by online platforms involving ride-hailing drivers, couriers, and freelance creative workers. While it offers flexibility, this system also presents legal challenges since most participants are legally categorized as “partners” rather than “employees” under Indonesian labor legislation. Such classification leaves gig workers exposed to vulnerabilities, including the absence of social security, income instability, and inadequate protection against unilateral termination. This article explores the issue through two theoretical perspectives rarely combined in labor law research: Karl Marx’s Exploitation Theory and the Pancasila Industrial Relations framework. Marx’s theory illustrates how platforms extract value from gig workers by means of algorithmic control while shifting economic risks and social responsibilities onto the workers. In contrast, Pancasila Industrial Relations provides a normative foundation emphasizing balance, cooperation, and social justice—principles that are often undermined in platform-mediated work relations. The study employs a normative-juridical methodology with conceptual and comparative approaches. The analysis finds that gig workers are situated in a regulatory grey zone, which allows the perpetuation of pseudo-employment arrangements. Therefore, legal reform is required by recognizing platform-based workers as a distinct category entitled to labor protections. This study contributes both theoretically and practically to the discourse on digital labor law in Indonesia by proposing an alternative analytical framework that is critical yet contextually grounded in contemporary realities.