online motorcycle taxi: image taken from media

The Partnership Paradox: Why Couriers and Ride-Hailing Drivers Struggle to Find Justice in Indonesia’s Industrial Relations Court

Every day, millions of Indonesians rely on ride-hailing drivers to get to work and on app-based couriers to deliver food, groceries, and packages. Behind the convenience of tapping a smartphone lies an invisible workforce that has become indispensable to Indonesia’s digital economy. Yet despite performing work that resembles traditional employment, these workers occupy a legal grey area: they are not considered employees but “partners.”

This distinction is far more than a matter of terminology. It determines whether platform workers are entitled to labor protections, social security, severance pay, or even access to the Industrial Relations Court (Pengadilan Hubungan Industrial or PHI). Ironically, those who spend their days working under platform rules often discover that, when disputes arise, the legal system does not recognize them as workers at all.

This is the partnership paradox.

A Partnership in Name, Employment in Practice

Digital platforms consistently characterize their relationship with drivers and couriers as a business partnership rather than an employment relationship. According to this model, the platform merely provides technological infrastructure that connects independent service providers with customers. Drivers are free to determine when and where they work, making them entrepreneurs rather than employees.

On paper, this arrangement appears attractive. It promises flexibility, autonomy, and entrepreneurial freedom.

Reality tells a different story.

Platforms determine fare structures, commission rates, incentive schemes, customer service standards, and performance metrics. Drivers who reject too many orders may receive fewer opportunities in the future. Customer ratings directly influence access to bonuses and even continued access to the platform. Most significantly, accounts can be suspended or permanently deactivated with limited procedural safeguards.

The relationship is therefore characterized by a substantial degree of control, even though it lacks the formal label of employment.

The nature of managerial authority has simply evolved. Instead of receiving instructions from a human supervisor, workers are now managed by algorithms.

Algorithmic Management and Invisible Control

The rise of platform work has introduced a new concept into labor law scholarship: algorithmic management. Rather than relying on direct supervision, companies use algorithms to allocate orders, evaluate performance, determine incentives, and impose sanctions.

To many drivers, the application itself functions as their manager.

The algorithm decides who receives high-value orders, who qualifies for bonuses, and, in some cases, whose account will be suspended. Workers rarely understand how these decisions are made because the algorithms operate as proprietary systems shielded from public scrutiny.

This technological evolution presents a serious challenge to conventional labor law.

Traditional employment relationships are typically identified by three fundamental elements: work performed, wages paid, and the employer’s authority to issue instructions. Platform companies argue that because drivers choose their own working hours, the element of employer control is absent.

However, this argument overlooks an important reality: control exercised through algorithms can be just as powerful as direct managerial supervision.

Why the Industrial Relations Court Often Cannot Help

When drivers are permanently deactivated or suffer losses due to unilateral platform policies, many naturally assume they can seek justice through Indonesia’s Industrial Relations Court.

Unfortunately, the law creates a significant procedural obstacle.

The Industrial Relations Court has jurisdiction only over disputes arising from an employment relationship. Before examining the substance of any claim, the court must first determine whether such a relationship legally exists.

This is where many platform workers encounter their greatest challenge.

Since the contractual agreement is drafted as a partnership agreement, platform companies argue that no employment relationship exists. Consequently, disputes fall outside the jurisdiction of the Industrial Relations Court and must instead be treated as ordinary civil disputes.

The result is deeply paradoxical.

Workers who function like employees in practice are denied access to labor justice because they are contractually labeled as partners.

The legal classification effectively closes the courthouse doors before the merits of the dispute are ever considered.

Standard Contracts and Unequal Bargaining Power

The problem extends beyond jurisdiction.

Most platform workers enter into standard-form contracts drafted entirely by the platform. They are offered no meaningful opportunity to negotiate the terms and conditions governing their work. Their only choice is to accept the agreement in full or decline access to the platform altogether.

From a contract law perspective, consent formally exists.

From a practical perspective, bargaining power does not.

This imbalance raises broader questions about the limits of contractual freedom in the digital economy. If one party possesses overwhelming economic power while the other depends on the platform for income, can the resulting agreement genuinely reflect equal consent?

The classical doctrine of freedom of contract becomes increasingly difficult to defend when acceptance is driven by economic necessity rather than genuine negotiation.

The Global Shift Toward Substantive Protection

Indonesia is not alone in confronting these challenges.

Across the world, courts and legislatures have begun reconsidering the legal status of platform workers.

In the United Kingdom, the Supreme Court concluded that Uber drivers qualified as “workers,” entitling them to minimum wage protections and paid leave. Spain adopted the Rider Law, establishing a presumption that food delivery riders are employees unless companies can prove otherwise. More recently, the European Union adopted the Platform Work Directive, which seeks to prevent companies from avoiding labor obligations simply by classifying workers as independent contractors.

These developments share a common principle.

Legal status should be determined by the actual nature of the working relationship not merely by the title written in a contract.

Substance should prevail over form.

Indonesia’s Legal Framework Must Catch Up

Indonesia’s labor law was developed for conventional employment relationships in which employers supervise workers directly within a physical workplace. Digital platforms have fundamentally altered that reality.

Algorithmic management, flexible scheduling, and digital labor marketplaces have created employment models that existing legal categories struggle to accommodate.

If lawmakers continue relying solely on contractual labels, millions of platform workers will remain trapped in legal uncertainty. They will shoulder the responsibilities of employees without enjoying the rights that accompany employment.

Legal reform should therefore focus on identifying employment relationships through objective indicators of control, economic dependency, and organizational integration rather than contractual terminology alone.

Equally important, access to dispute resolution mechanisms must evolve. Workers should not lose access to labor justice merely because a company unilaterally chooses to describe the relationship as a partnership.

Justice Should Not Depend on a Contract’s Label

At its core, the debate over ride hailing drivers and app-based couriers is not simply about employment classification.

It is about access to justice.

When individuals devote their time, labor, and livelihood to generating value for a digital platform while remaining subject to its rules and disciplinary mechanisms, the law should examine the substance of that relationship rather than its contractual label.

Innovation undoubtedly deserves encouragement. Digital platforms have transformed transportation, logistics, and commerce in remarkable ways. Yet innovation should not come at the expense of fundamental legal protections.

As the digital economy continues to expand, labor law faces a defining question: should technology reshape legal principles, or should legal principles evolve to ensure that technological innovation remains consistent with fairness and justice?

The answer will determine whether millions of platform workers remain invisible in the eyes of the law or finally gain meaningful access to justice.