Shopee’s logistics arm hits speed bump as some workers lament low wages

In April 2021, unhappiness among couriers for Shopee Express, the logistics unit of ecommerce player Shopee, regarding the latest adjustment to their earnings scheme spread onto social media.

Rian (not his real name), a Shopee Express courier based in South Jakarta, told Tech in Asia that he and his co-workers are now expected to deliver more packages per day – 40 instead of the previous 30 – for the same amount of money. Furthermore, the bonus fee, which couriers earn if they deliver more than the 40 packages, went down roughly by half.

A tale of two posters: “We stock up on your needs for you” (left) and “You #shopfromhome for Indonesia” (right) / Photo credit: Shopee

With the current scheme, Rian calculated that he can only take home a maximum of 130,000 rupiah (US$9) per day, which is about 30% lower than what he was earning before. Even if he works 30 days a month, his earnings still would not meet Jakarta’s minimum wage, which is set at around 4.4 million rupiah (US$312).

The latest outburst is another flashpoint involving contract workers and the powerful tech giants that they slog for. Internet companies walk a fine line between keeping costs low and sustainable and ensuring that these workers are incentivized enough to take on more jobs.

Like ride-hailing drivers, most Shopee Express couriers are considered independent contractors. As such, their wages are considered variable costs, which are typically the starting point of a cost-cutting measure among businesses.

This conflict also comes at a time when Southeast Asia’s logistics companies – some of which have become unicorns while raising mega rounds – are on course for a price war.

Earning above the norm

Responding to worker discontent, Handika Jahja, Shopee Indonesia’s executive director, told Tech in Asia in a previous interview that even with the adjustments, the company’s rates are still higher than the market average.

He also denied reports that Shopee Indonesia’s couriers went on strike. Furthermore, even if there were couriers who did not come to work, Jahja said it was only fair since they are not considered employees of the company. “Under the partnership terms, the courier can choose whether to come to work or not,” he added.

Jahja also stated that couriers can collect 2,200 rupiah (US$0.15) per package if they deliver more than 80 per day. But according to Rian, delivering 80 packages daily is not realistic. The Shopee Express courier noted that it really depends on the number of packages available on that day as well as how many workers are allocated to each shift.

The seniority of couriers is also a factor. Rian said the senior ones can choose small packages and short delivery distances, so they can carry more packages in a day compared to their more junior counterparts. Beginner couriers often get the “leftover” packages, which are usually larger-sized and have lengthier delivery distances.

“If the weather is good, we can finish sending 80 packages by 5 p.m. But sometimes there are only 40 packages, so it’s not certain,” shares Rian.

Outside Jakarta, it’s a different story. To Firman (not his real name), a Shopee Express courier in the Central Java province, getting 80 packages per day is almost impossible. On an average day, he typically delivers a dozen packages.

Lessons from older players

A fairer and more efficient system