Why governance matters for the gig economy

The gig economy is now a structural feature of Asia-Pacific labour markets, where informal work is essential for the survival of millions. According to the World Bank, between 154 million and 435 million people globally are engaged in online gig jobs, up to 12.5% of the labour force. In China alone, over 200 million people (about 40% of the urban workforce) depend on flexible work. India is projected to have 23.5 million gig workers by 2030, making up 40% of the global freelance market. Bangladesh, Pakistan, the Philippines, and Vietnam are also emerging as major hubs. 

This transformation is driven by demographic shifts, rapid urbanization, and a sweeping digital transition. Many countries face a youth bulge, with millions entering the workforce each year while formal job opportunities remain scarce or inaccessible. For many, gig work is not merely a choice but a necessity-a way to enter and stay in the labour market. The COVID-19 pandemic further accelerated the adoption of platform-based work, embedding gig work more deeply into national labour markets.

In the words of Kanni Wignaraja, UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific: “The gig economy is not just about jobs, it’s a governance and human development issue, one on which the opportunities of millions workers, businesses and families will depend on how fair, how secure, and how flexible gig work systems are developed. These systems must work for everyone: gig workers, users of gig services, and the wider economy.”

Effective governance is essential for ensuring fairness, trust, and sustainability in gig economic systems. It can help address structural inequalities embedded in platform-based work, extend social protection to gig work, and improve visibility for vulnerable (and often underpaid) workers, particularly women. Transparency and accountability are key to preventing exploitation and ensuring better working conditions. That’s why governance matters to the gig. 

The socio-economic aspects of gig work in Asia-Pacific 

Asia-Pacific’s gig economy is highly diverse, spanning location-based gigs (such as ride-hailing and delivery) and online “cloud” gigs (such as digital freelancing, design, and programming). The gig work has become a major component of the region’s vast informal economy. For many, gig work is a buffer against shocks and a driver of transformation, but one that requires deliberate governance to ensure equity and sustainability. It is also a source of innovation and entrepreneurship, as many entrepreneurs use gig work as a resource or as a launchpad for their ventures.

The flexibility of gig work is especially significant for women, caregivers, and those in remote communities.  While flexibility offers advantages, it is often linked to precarious conditions: low and volatile earnings, long and irregular hours, and limited safety and social protections.

The gig economy is difficult to measure because in many countries it doesn’t exist in a strict legal sense. Most gig workers are classified as self-employed contractors, lacking access to health insurance, pensions, or grievance mechanisms. Income volatility is a persistent challenge, with about half of online platform workers earning under $2 per hour. Gender pay gaps are also present in many cases, with women concentrated in lower-paid care and microwork tasks, while men dominate higher-paid delivery and driving roles.

The digital divide remains a barrier for entry in gig work. Access to the internet and digital tools is fundamental for participating in the gig economy, but disparities in connectivity, digital literacy, and English skills create inequities. Women face additional constraints related to access, safety, and care responsibilities, shaping both their entry into gig work and the types of opportunities available to them.

A defining feature of gig work is algorithmic management. Workers are increasingly governed by opaque systems that allocate tasks, set prices, rank performance, and enforce discipline, often without transparency or recourse. This creates significant power asymmetries between platforms and workers, limiting agency and accountability.

Artificial intelligence is rapidly reshaping online gig work. As part of UNDP’s new report, The Next Great Divergence, researchers at the Aapti Institute found that AI adoption brings both complementary and substitution effects. “Generative AI tends to replace low-complexity, low-wage tasks, making it harder for entry-level workers to enter the market. We also saw rising expectations for online gig workers, with a significant increase in baseline skills required to compete,” authors conclude.

The gig economy is expected to expand fast in the Asia-Pacific region. The region will account for 80% of global middle-class growth in the coming years, and gig work will play a pivotal role in this transformation.

The socio-economic dynamics underscore why gig work cannot be treated as a marginal or temporary phenomenon. It is reshaping labour markets, livelihoods, and development pathways across the region, making effective governance essential to ensure that gig work contributes to inclusive growth rather than deepening inequality.

What gig governance can look like 

Governance frameworks must address the current structural challenges of the gig economy and ensure that it contributes to inclusive growth.  Effective gig governance must balance flexibility with protection, innovation with accountability, and national policy with the cross-border nature of digital platforms. Here are some key considerations:

Social protection rights: Malaysia’s 2025 Gig Workers Bill formally recognizes gig workers as a distinct labor category, providing legal protections, dispute resolution, income standards, and social security coverage. Singapore’s Platform Workers Framework makes pension contributions mandatory for ride-hailing and delivery workers, with platforms matching payments. These emerging governance initiatives are encouraging, and they can serve as models for other countries.  

Taxation and fiscal policy: Governments need mechanisms to tax income generated domestically but paid through global platforms, while ensuring that gig workers are not disproportionately burdened. Earmarked digital levies and clearer employment categories that recognize gig work can help rebalance fiscal burdens and strengthen national welfare systems.

Portability of benefits: Portable benefits systems, where contributions accrue in an individual worker account regardless of the platform, help smooth the impact of fluctuating earnings by ensuring continued access to health insurance, pensions, and injury protection.

Algorithm transparency: Governance oversight should extend to platform algorithms, data systems, and reporting practices. Measures such as algorithmic audit requirements, disclosure of pricing and ranking logic, and independent assessments can help rebalance power between platforms and workers.

Gender perspective: Gender-responsive design standards must be embedded within both platform architecture and regulatory frameworks. Safety protocols, childcare credits, flexible scheduling, and compensated downtime can address the disproportionate care responsibilities that often push women into lower-paid microwork.

Cross-border clarity: The global reach of digital platforms has transformed the gig economy into an international opportunity, but also intensifies competition and income volatility. Harmonized norms and cross-border cooperation are needed to address transnational challenges.

Anticipatory governance 

AI and automation are rapidly changing the gig economy landscape. AI can generate new gig opportunities, such as data labeling and “prompt engineering”, but also threatens to automate many tasks currently performed by gig workers. The net impact is complex: while some workers may benefit from new roles, others may face displacement and downward pressure on earnings. Online gig workers in Asia-Pacific face a greater risk of job displacement from AI than location-based gig workers providing in-person services.  

Gig governance must be anticipatory, not reactive. As a new paper released by UNDP concludes, “The nature of gig work will change dramatically, and policy frameworks will need to anticipate and respond to these transitions rather than react after the fact.”  

This calls for integrated approaches across labour markets, social protection, digital governance, climate action and national development planning. By embedding gig-economy considerations into national reforms and strengthening regional collaboration, countries can shape platform work in ways that expand opportunity, protect workers’ rights, and support long-term development and climate goals.

The gig economy’s future in Asia-Pacific will be shaped by how governments, platforms, and workers navigate the interplay of technology, regulation, and human development. With the right governance frameworks and incentives, gig work can be a pathway to inclusive growth, resilient livelihoods, and equitable digital transitions for millions across the region and build trust and social contracts.

This piece is based on a new policy brief in the Asia-Pacific Perspectives series, Harnessing the Gig Economy: A Systems Approach to Inclusive Growth in Asia and the Pacific. It was prepared by the RBAP communications team and Nazneen Ahmed, Policy Adviser and lead author of the brief.