Bangladesh's gig economy grows but workers remain vulnerable
Gig workers remain outside the protections of formal employment. They are effectively part of the informal sector—serving the economy but unaccounted for
Highlights:
- Gig economy sustains jobless Bangladeshi youth amid scarce employment
- Over one million Bangladeshis work in ride-sharing, delivery, freelancing
- Workers lack protections: no insurance, benefits, or income security
- Internet shutdowns and unrest expose gig workers' extreme vulnerability
- Financing, remittance restrictions trap drivers, freelancers in precarious conditions
- Draft reforms seek recognition, fair wages, insurance, and accountability
On a humid afternoon in Mogbazar in Dhaka, Arif Hosain, a university student, weaves through traffic on his motorbike delivering food orders. He works 3 to 4 hours a day and the income helps pay his tuition fees and rent. For him, like hundreds of thousands of young Bangladeshis, gig work has become a survival strategy in the absence of formal jobs.
Across the globe, no economy can absorb its entire workforce in traditional employment. But in Bangladesh, where unemployment benefits are absent and graduate jobs scarce, the challenge is starker. Surveys suggest only one in three university graduates secures a formal job. For the rest, a new avenue has opened up: the gig economy.
A global shift in work
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Gig work—short-term, flexible, often app-based jobs—has been reshaping how people earn and how companies hire. Globally, it now accounts for around 12% of the labour market, with freelance work expected to grow at a 15% annual rate through next year.
In the US, nearly 59 million people—about a third of the workforce—are independent workers. China counts 200 million gig workers, or 40% of its urban labour force. India's platforms engage around 10 million people, while Malaysia's 1.2 million workers make up 7% of its workforce.
The trend has made significant inroads in Bangladesh with more than a million people now engaged in gig work—from ride-sharing and food delivery to freelancing and e-commerce. The growth has been rapid over the past 15 years and accelerated during the Covid-19 pandemic, when lockdowns created surging demand for home delivery.
A low-barrier entry
For Bangladeshi youths, gig platforms offer a safety valve. Entry barriers are low: a motorbike, a bicycle, or even just a smartphone and Google Maps can be enough to start earning. Students deliver food between classes; graduates drive ride-share cars while waiting for better opportunities.
Industry insiders estimate that about 200,000 drivers work in ride-sharing, 400,000 in deliveries, and another 500,000 in freelancing. According to the e-Commerce Association of Bangladesh (e-CAB), over half a million entrepreneurs are engaged in online trade.
Employers, too, benefit. Platforms reduce recruitment costs and avoid carrying permanent staff on payrolls. Customers enjoy faster and more personalised services at their doorsteps. The model satisfies all three stakeholders—at least in the short run.
Precarity in plain sight
Yet gig workers remain outside the protections of formal employment. They are effectively part of the informal sector—serving the economy but unaccounted for. They have no service benefits, insurance, or compensation in case of accidents, damaged goods, or income loss during disruptions.
The vulnerability became clear during Bangladesh's 10-day internet shutdown in July 2024 amid political unrest. Ride-sharing trips collapsed, cutting daily earnings to a fifth. Delivery workers, paid only on commission, saw their income vanish overnight.
Globally, too, the risks are evident. In Indonesia this August, a ride-sharing biker was killed by an armoured vehicle during demonstrations—a grim reminder of the dangers gig workers face.
Ironically, it was unemployment itself that fuelled Bangladesh's 2024 protests, eventually toppling Sheikh Hasina's regime.
A capital trap
Access to finance remains another barrier. AKM Fahim Mashroor, founder of bdjobs and e-commerce platform AjkerDeal, argues that gig workers are trapped by lack of capital. More than 90% of ride-sharing drivers run rented cars, handing over nearly half their income to owners.
"If a driver owns his car, his income would be enough to live a decent life," Mashroor told The Business Standard. "There will be a huge social impact if banks give loans to ride-sharing drivers based on their income."
He suggests banks create dedicated loan products, with cars initially registered under leasing companies. Ownership could then be transferred to drivers after repayment. "You just need a policy. Bangladesh Bank has a role to play here," Mashroor added.
Barriers for freelancers
For freelancers serving overseas clients, the hurdle is different: dollar inflows. Pathao co-founder Hussain M. Elius, who has also invested in tech startups, says the restrictions are holding back Bangladesh's gig economy.
"Why is it so difficult to bring USD into Bangladesh?" Elius asked. "Freelancers don't want to go through layers of paperwork or pay fees to associations. They just want a simple, transparent way to bring in their earnings."
He noted that peers like the Philippines, Indonesia, and Vietnam have built robust gig economies, supported by smoother remittance systems and clearer policies. Bangladesh risks falling behind, he warned.
Elius also criticised the internet blackout during last year's uprising, which he said wiped out a decade of credibility built by the country's e-commerce sector. "That single decision destroyed the respect we built over the last 10 years. Bangladesh is no longer seen as a reliable country for investment," he remarked.
Recognition and reform
Some progress is visible. The Oxford Internet Institute's Fairwork programme began ranking Bangladesh in 2021, and by 2023, two local platforms scored 5 out of 10 for worker protections, up from zero. Several others still remain at the bottom.
Encouragingly, Bangladesh's draft labour law has started to recognise the gig economy. The interim government's labour reform commission has recommended protecting gig workers' rights—formally recognising ride-share drivers as workers, ensuring fair wages, lowering platform commission fees, and holding multinational gig firms accountable. Proposals also include better passenger safety, worker databases, and accident insurance.
Other Asian countries are already taking substantial measures. China is considering social security coverage for gig workers. India is urging platform workers to register for accident insurance and healthcare. The Economist has suggested mandatory employer contributions and pension reforms to make the most of Asia's youthful workforce before it ages.
A policy test ahead
Bangladesh's gig economy is a classic paradox: a lifeline for the unemployed and a regulatory loophole for businesses. On one hand, it's a massive relief valve—it soaks up jobless youth, cuts recruitment friction for firms, and offers convenience to millions. On the other, it leaves its workforce deeply precarious, unprotected, and utterly exposed to economic instability.
The acid test for policymakers is how to bring in formal recognition and essential safeguards without destroying the very flexibility that makes gig work so appealing. With an estimated million-plus workers—and youth joblessness ticking like a time bomb—the decisions taken today will define whether this sector acts as a true bridge to prosperity or merely becomes a sinkhole of long-term insecurity.
