For many, working on online platforms is more of a survival strategy than a conscious career choice, according to a new brief report from the Development Monitoring Centre.
The Development Monitoring Centre is an analytical center under the Riigikogu that focuses on analyzing the future development of society and the economy. The center conducts research projects aimed at analyzing long-term social trends, as well as identifying new trends and development vectors.
Olavi Miller, an expert at the Development Monitoring Centre, explained that in recent years, the platform economy has become more diverse and has deeply integrated into the overall economy of the country.
"Work on platforms is no longer limited to just taxi services and food delivery, and its spread affects both the structure of the labor market and the competitiveness of the economy. This type of employment has covered many areas, becoming a common phenomenon in legal consulting, accounting, software development, as well as in design and content creation," Miller listed.
Last year, 17 intermediary companies offering jobs through platforms were registered in Estonia, and their total sales revenue in the local market exceeded 21 million euros.
A survey showed that of those who work on platforms regularly, only one in ten earns all their income this way; the rest combine this activity with paid employment or receiving a pension. Respondents consider flexibility to be the main advantage of such employment.
Almost a third of respondents regularly perform location-based work, such as providing courier services or transporting passengers. The study revealed a worrying trend: many of them work more than 50 hours a week, which negatively affects their health and limits opportunities for education.
Nearly half of the respondents perform online work, seeing it as an opportunity to expand their client base and enter international markets. The workload in this area is generally lower; however, instability and high competition are also observed here, forcing performers to agree to lower pay, compensating for it with a larger number of working hours. The head of the working group, Professor Tauri Tuvikene from the Institute of Humanities at Tallinn University, noted that if current trends continue, polarization in the labor market will only intensify.
"Highly skilled specialists use platforms for career advancement, while people with lower incomes risk falling into the trap of unstable and exhausting location-based work. For example, a quarter of surveyed couriers and taxi drivers work overtime, some for 70–100 hours a week, while a full-time workweek in Estonia is 40 hours," Tuvikene stated.
In its brief report, the Development Monitoring Centre also notes that this sector is characterized by insufficient and unstable social protection. The study showed that 14% of those who regularly work through platforms do not have health insurance, and only 32% have unemployment insurance. Pension contributions to the state system are made by 31% of respondents.
The brief report "The Situation of Platform Workers in Estonia" is based on the first interim results of a study commissioned by the Development Monitoring Centre and the Ministry of Economic Affairs and Communications (MKM). This work is a continuation of the center's research direction dedicated to the future of the labor market, within which platform work in Estonia was already studied in 2018 and 2021. The research is conducted by Tallinn University of Technology, the University of Tartu, and Tallinn University, and is funded by the Estonian Research Agency and MKM.
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