Fast-growing online gig work opening new markets for Kenya’s workforce

Nairobi, September 2, 2019: Mercy Corps’ Youth Impact Labs recently launched a new report on Kenya’s gig economy. The report shows that the online gig economy is a fast-growing segment that could be among solutions to Kenya’s growing unemployment among young people.

The ground-breaking study — “Towards a digital workforce: Understanding the building blocks of Kenya’s gig economy” — estimates that the total size of the online Kenyan gig economy, as at July 2019 is $109 million and is employing a total of 36,573 gig workers. Based on the existing platforms and assuming that the investment remains the same, the online Kenyan gig economy is expected to grow by 33 per cent over the next five years to a tune of $345 million. The sector is also projected to employ a total of 93,875 gig workers, representing a growth rate of 27 per cent in 2023.

“Gig work is revolutionizing the Kenyan economy and changing the Kenyan workforce. It demonstrates that online platforms such as Lynk and Uber could help in solving the issue of unemployment among a substantial workforce of talented and innovative young people in Kenya,” said Jerioth Mwaura, the Youth Impact Labs Partnership Manager at Mercy Corps Kenya.

“It is also being fueled by the fact that clients are willing to pay a premium for convenience and quality work and increasing digital trust and willingness to purchase services online.”

Findings show that the total size of the offline Kenyan gig economy is 5.1 million workers accounting for $19.6 billion in 2019 across six key sectors, namely agriculture, manufacturing, trade & hospitality, construction, transport & communication and community, social & personal services.

Together, the online and offline gig economy accounts for $19.7 billion employing 5.13 million workers.

The research, which is the first of it’s kind in Kenya, also shows that gig work is anticipated to experience a significant growth. However, the gig market lacks regulation in social protection, equal employment opportunities and labour standards that are specific to the gig economy as the current laws and regulations in Kenya are geared towards the formal employment.

While the sector holds considerable promise to formalize Kenya’s workforce, there are evident opportunities to catalyze faster growth of the sector. Collaboration between industry stakeholders in a bid to unlock barriers, streamline efforts and set up growth drivers will be critical in unlocking gig work in Kenya.

During the research, Mercy Corps Kenya identified the five main digital ‘sectors’ of online gig work where youth are getting employed as the ride-hailing platforms like Uber and Getboba, online rentals -Airbnb, online professional work platforms like Upwork and blue-collar matchmaking platforms like Lynk. These platforms have enabled gig workers to exploit underused physical and human capacity, transforming dormant capital into working capital.

“Gig workers have the potential to enable Kenya to make meaningful headway towards achieving sustainable development, through a deliberate focus on investments that create job opportunities. Therefore, there is a necessity to have policies to protect the growing number of young gig workers as many are working in a regulatory grey zone,” add Ms Mwaura.