Social Protection for Platform Workers: What Can Georgia Learn from International Experience?

Abstract

New forms of employment, such as the digital platform economy, have been emerging in various occupations and sectors worldwide. The latter entails working arrangements during which the workers find and implement short-term, one-off assignments through online platforms. While some of these jobs may provide greater flexibility for workers, they may also lead to significant gaps in social protection coverage [1]. The main reason for this is that, in many cases, new forms of employment are found in "non-standard" forms, such as part-time or temporary work, with blurred lines between genuine and dependent self-employment [2]. Platform workers have no formal employer since platform management views them as "partners" rather than "employees ."Therefore, these workers are not provided with regular wages, and most importantly, they cannot enjoy the labor and social rights guaranteed by the Labour legislation.   Due to this reason, most platform workers have lower job and income security, poorer working conditions, and significant deficits in social protection coverage compared to workers in standard forms of employment [3]. Therefore, significant focus in the literature is placed on changing the existing social protection systems to meet the platform workers' needs better. The number of platform workers has been increasing in Georgia over the last few years, with the companies like "Bolt," "Wolt," "Glovo" and other similar platform companies entering the local market. There is a dearth of research in Georgia about the profile of the workers employed by these companies and the lack of information about their social, economic, or educational background. At the same time, there is little discussion among academic or policy circles about the gaps in their social security coverage and the need for adapting social protection systems to meet the requirements of these workers. It is critical to mention that the social protection system in Georgia, much like in other post-soviet economies, is rudimentary, causing further challenges in elaborating platform workers' social security mechanisms. Given the absence of basic income maintenance schemes, platform workers and regular employees in standard employment relations also lack basic social security in Georgia. The proposed paper aims to analyze the international experience in the reforms targeting platform workers and the possibility of introducing similar reforms in Georgia. Therefore, the study's first objective is critically to assess the reforms in advanced and low to middle-income economies. The experience of the latter group of countries is interesting because socio-economic conditions are more similar to Georgian reality compared to advanced economies. On the other hand, Georgia's European aspiration and respective drive to modernize the social security system call on the necessity to review the experience of EU countries as well. This will provide an opportunity to consider the difficulties experienced by these countries and therefore ensure that platform workers’ interests are maximally considered during the subsequent reforms in the country. The study is based on a desk review of up to 40 academic papers and reports by International and local organizations. For the social security system assessment in Georgia, a secondary analysis of statistical data (labor force survey) was carried out in addition to the document review. Based on the analysis, the paper examines the possible reform alternatives in Georgia. More precisely, it argues that there are two main areas of reform. Firstly, the legislation should define and acknowledge the concept of platform workers. It is a critical precondition of extending social protection programs to platform workers. Secondly, preference should be given to tax-financed security mechanisms over contribution-based insurance systems, although the latter can exist as a supplementary mechanism.