Platform Economy at a Crossroads: Between Efficiency and Fairness
For millions of online motorcycle taxi drivers in Indonesia, the mobile phone screen is no longer merely a gateway to additional income. It has become the main gateway determining whether today is enough to eat, pay rent, or simply survive. This shift has occurred gradually and has largely escaped policy attention.
Online transport initially grew from the spirit of the sharing economy. Underutilised vehicles and time could be used to earn additional income. For drivers, flexibility was the main attraction. For consumers, technology lowered search costs and expanded service options.
As it developed, the model changed. In the gig economy phase, order volumes increased, incentives and rating systems became more important, and algorithms began to regulate demand distribution. Platforms then evolved into broader ecosystems encompassing logistics, payments, and financing. Today, for some drivers, the platform is no longer a source of supplementary income but their primary livelihood.
This change matters because it alters economic relationships within the ecosystem. Income risk is more easily absorbed by individuals while platform work remains supplementary. The situation differs when most income depends on the platform, because changes in fares, commissions, incentives, or algorithm policies directly affect drivers’ ability to meet daily needs.
Platform as Economic Infrastructure
There is another dimension rarely entering the debate about commissions. Online transport platforms are no longer merely transport service providers. They have become part of Indonesia’s economic infrastructure, on par with telecommunications networks and payment systems. Their reach touches millions of households, micro-enterprises, and consumers.
This role is most visible in the ease of entry. The barriers to becoming a driver are far lower than almost any formal job, whether for people who have lost their jobs, recently moved cities, need additional income, or do not yet have formal employment.
In practice, platforms function as a digital economic safety net, a place where people earn income when the formal sector has not yet absorbed them. This function operates precisely as Indonesia is at the peak of its demographic bonus, when the labour force is growing faster than the formal sector’s absorptive capacity.
A function of this magnitude carries consequences. Disruption to a single platform affects not only the company but also the daily income of many families. A sector supporting so many livelihoods cannot be treated merely as a private business matter. The state’s presence here is a consequence of that function, not excessive interference.
Indications of Market Failure
In principle, the government need not regulate a well-functioning market. Overly hasty regulation can actually hinder innovation and investment. Intervention should begin when there are indications of market failure, that is, when market mechanisms no longer produce a healthy equilibrium for the parties involved.
Digital platforms do create efficiency, but growing dependence can produce an imbalance in bargaining positions. Platforms possess data, technology, and the ability to set operational rules. Drivers do not have equal information regarding price formation, order distribution, or policy changes.
This imbalance is rooted in market structure. The service is dominated by two major players, while network effects make it difficult for new competitors to enter because the value of the service increases as the number of users grows. Platforms are in a position to determine commissions as well as operational rules, while drivers have limited options.
Information asymmetry is visible in how algorithms work. Drivers do not know how orders are distributed, fares are structured, and incentives are set, while account suspensions often occur without adequate clarification. These conditions leave them without sufficient basis to make decisions about increasing their income.
Another issue relates to costs not included in the platform’s calculations. Fuel costs, vehicle maintenance, and data quotas are borne entirely by drivers, while long working hours increase the risk of accidents and health problems. The price formed in the market does not reflect the true cost as long as that burden is borne by drivers and society.
These conditions are ultimately visible in income levels. Drivers’ net income remains below the minimum wage, while health insurance, workplace accident cover, and old-age security are not yet adequately available. A market that demands long working hours but has not been able to provide a decent income and basic protection can hardly be called healthy.
The purpose of intervention is not to make drivers win over platforms. The government needs to maintain alignment of interests. Not because this is about choosing the right side, but because a healthy ecosystem is not a zero-sum game. If one party collapses, everyone falls together. Drivers need adequate income and transparent calculations, consumers need fair prices and safe services, while platforms need room to invest and grow.
Value Distribution in the Ecosystem
The large economic impact of a platform does not automatically mean its value distribution is optimal. The question is simple: who enjoys that value, whether the platform, drivers, business partners, consumers, or Indonesia. Large economic contribution is often used as a measure of success, yet that measure does not explain how the value is divided.
This pattern of value shift is referred to in the literature as enshittification or platform decay. The term describes the process by which a platform that initially provided many benefits to users gradually degrades.