Tina Zintl, German Development Institute (DIE)
On a global scale, digitalization is a disruptive megatrend with profound impacts on labour: new jobs are created, other jobs are lost through automatization. There is widespread consensus that this megatrend cannot, and should not, be stopped but steered and used. Just how regulators should respond to digital goods and services is less clear. When regulating this relatively new branch of business, authorities need to manoeuvre between multiple opportunities and challenges. In the MENA region, governments and jobseekers have pinned their hopes on digital platforms and service-providers to open up new, flexible job opportunities to the unemployed. Yet, there are considerable risks, such as a concentration of market power and often poor working conditions, inherently connected to the question of whether or not governments can manage to regulate platforms.
In Jordan, the boom of ride-hailing applications such as Uber or its former competitor, now subsidiary, Careem promised quick private sector job creation and better and safer mobility for passengers. Jordanian authorities faced a choice between licensing ride-hailing platforms, and thus allowing flexible yet informal job creation in this field, or protecting entrenched taxi businesses with formally trained and accredited drivers. Against the backdrop of a dire economic situation and rampant unemployment figures, Jordan’s regulators decided for a middle way, licensing ride-hailing platforms yet limiting their growth and confining them to an upmarket line of business. Yet this created new factions and insider-outsider dynamics on the labour market, because Careem’s so-called captains neither belong to Jordan’s informally working ‘outsiders’ nor its formally working public or private sector ‘insiders’. Like the former (and like platform workers globally), they face precarious working conditions and are not represented by unions, thus constituting ‘outsiders’. Yet, unlike other international platform workers and even unlike Jordan’s labour market ‘insiders’, they are privileged in respect to higher income potentials and hence constitute a new category which could be dubbed ‘privileged outsiders’.
In this memo, I discuss (i) how Careem as a major player of the MENA platform economy successfully entered the market in Jordan’s capital and created jobs, (ii) their drivers’ employment situation and working conditions and (iii) how regulators, by confining taxi and ride-hailing businesses to different lines of business, created fairer competition but also (iv) segmented Jordan’s labour market by distorting wage levels and incentives for the highly-skilled. Empirically, the memo draws on conversations and interviews with Careem captains and managerial staff, taxi drivers and customers in spring and summer 2019 in Amman.
Careem’s quick market entry in Jordan’s capital Amman: mobility and jobs
The ride-hailing platforms Uber and Careem entered the Jordanian market in 2015 as major players for ride-hailing via smartphone app. Both improved mobility and created lucrative, flexible jobs as so-called captains (Careem) and partner drivers (Uber). Local competitors never reached sizeable market coverage.
By offering safe, reliable and highly customised ‘from doorstep to doorstep’ transport, digital ride-hailing services quickly grew in Jordan’s capital. Amman’s urban sprawl, notorious traffic congestion, a dearth of public transport options and a predominant perception of local cab drivers’ behaviour as fraudulent and aggressive helped to spur the trend. Tourists and international aid personnel supporting Jordan in its Syrian refugee response contributed to the upsurge in interest, since they did not need knowledge of the place, Arabic or bargaining skills to use a ride-hailing app. Passengers were prepared to pay 10-50% higher fares in comparison to taxis. For platform operators, it proved a highly profitable business – both Careem and Uber in 2019 received 20-25% of the ride fare – and its drivers expected to earn a decent income.
By definition, the platform economy eases job creation because it digitally brokers work tasks to contracted labour with huge efficiency gains. Jordan, like most MENA countries, struggles with high unemployment: in 2019, the official rate stood at 19.1%, with youth and graduate unemployment at 37.3% and 33.5%, respectively.
With its market success, applying to Careem became a viable option for many Jordanians. In 2015 it had 50 captains; by 2018, before it was regulated, it had 11,000. By mid-2019, around 6,000 Jordan worked for Careem, 5,500 as drivers, 480 in a regional call centre and 45 as operating staff in Careem’s Amman office. Three issues attracted applicants for driver positions: fairly easy application procedures, a modern image and, especially, high income opportunities.
- Easy application procedures: Most conditions for becoming a captain are rather easily met, like a driving licence and a clean police record, maximum age and good maintenance of the car, as well as a smartphone including mobile broadband. Because of specific Jordanian regulations prospective drivers need to prove car ownership or being a first-line relative of the owner. This involves a major upfront investment, maintenance costs and incidental expenses. This means that unemployed members of the middle classes, who can afford it and seek to secure their social status, often become captains, not those in dire need of part-time jobs. Several interviewees confirmed that they or co-workers had taken out a bank loan, resulting in financial dependency while paying-off the loan (mostly 600 JOD monthly for 5-6 years, rarely private loans at a cheaper interest rate). Some had sold their small business or spent their dismissal wage on the car.
- Modern image: Careem’s modern ‘techie’ image reinforces the attraction for the job-seeking middle class. Even those “from a good family”, as one interviewee put it, who would have never considered driving a cab because of the associated low status, became captains. Careem Jordan staff emphasized: “We kind of elevated their role: in our branding, in our communications we’ve always used the young, cool [term] captains.” This is in line with international experiences that “[t]he gig economy tech-washes this work into something more culturally desirable.”
- High income opportunities: Most importantly, applicants were attracted because gross income is – or was pre-Covid-19 – high, especially for a task not requiring specific skills or qualifications. Interviewees reportedly earned up to 1,000 JOD per month as full-time captains – almost double the average nominal Jordanian wage of 524 JOD or over 4.5 times Jordan’s minimum wage of 220 JOD, though at longer working hours and before the deduction of incidentals. One interviewee estimated he earned 1,000-1,200 JOD per month for driving 12 hours per day, compared to previously 300 JOD monthly as an accountant. A retired teacher calculated earnings of up to 1,500 JOD monthly for driving passengers 10 hours per day, which is double to triple his previous salary of 500 JOD for 6-7 hours daily. Even part-timers, switching on their Careem account for about 5 hours, make 20 JOD daily or about 560 JOD monthly.
The recruitment of captains became highly competitive. As of summer 2019, about 75% of applicants were turned down and 3-4,000 kept on a waiting list. There were no free licenses due to an over 90% retention rate, which is much higher than Uber’s in the US.
Supporting businesses benefitted from Careem’s success, too. Business opportunities widened for mobile phone operators and car dealers, especially those offering sought-after hybrid models, insurance companies, or banks granting car loans. Careem uses a particular bank as a billing agent, so captains need to open a bank account with it to receive their weekly breakdowns of credit-card payments.
Drivers’ profiles and precarious working conditions
Most captains are male and well-educated, but they vary by age and by motivation for driving. Above all they value the flexibility – they can log onto the app regularly or occasionally, thus easily accommodating alternative duties like part-time jobs or childcare. Despite this flexibility and the modern image, there are hardly any female captainahs – few Jordanian women are self-employed or in the informal sector. Ride-hailing, however, indirectly contributes to female labour market participation as female customers commuting to work value the safety of a five-star rating system and the “track my ride” function to share driver details and passengers’ exact location. Using Careem thus helps women respect cultural norms but driving Careem counteracts these norms as it requires customer contact with strangers.
Captains drive for different motivations, but all of them are enterprising and proactively navigating through sometimes difficult life situations (this further illustrates Nada Berrada’s point in this volume, that the common labelling of young job-seekers’ efforts as “waithood” is misleading). A first group of captains sees their job as a temporary solution, supporting them while they are transitioning to a new job or field of work, as a springboard and cash cow for emigration or, in rare cases, to accumulate seed capital for a small enterprise. A second group regards Careem as a more permanent job, as a backup while waiting for their next order as a freelance architect or graphic designer, or after they were laid off or experienced a major wage cut in their old job. Some sold their old businesses (e.g., small restaurants, car-repair shops) because of better income opportunities. Several lorry drivers switched to passenger transport after Jordan’s 2015 anti-terror border closure with Iraq. Public sector retirees signed up, some drive just for the entertainment. Yet, most captains rely on the income to make a living for themselves and their families. Some spend it on their own or – in my sample more often – their children’s education, paying university or private school fees. Yet, part-time university students, which became to be seen as the ‘prototype’ captains, constituted only a fraction of captains in my sample.
Globally, platform workers are by default labour-market outsiders – a new class of informally working new-comers to an already established system of unions, regulations, and even other informal, yet entrenched workers in the same field. They are misclassified as micro-entrepreneurs or freelance contractors. They bear the full risk of entrepreneurs but lack control over entrepreneurial decisions like which products or services are offered to which customers at which price. No matter the reason demand for their services drops, it is the drivers and not the platform operators which face fluctuating income. Platform operators self-ascribe as mere brokers and providers of a labour-matching technology and deny employers’ responsibilities, thus circumventing regulations valid for competitors, e.g. transport companies. Working conditions are mostly poor as workers receive no social benefits; they cannot appeal against unfair treatment or missing payments; they may be dismissed quickly by unilateral de-activation of their accounts and face immense difficulties in organizing themselves; usually they are not represented by any workers’ council. Flexible working hours come at a price as drivers also must be flexible and work in accordance with demand, not with their own preferred schedule, to maximise their income. The informality can take its toll on the quality of the service and jeopardize road safety because, as interviewees confirmed, there are no maximum driving hours or agreed off-times.
In 2019, most interviewed captains were, however, content with Careem’s working conditions. Considering that in Jordan there are no unemployment benefits and – unlike in some North African countries – no unemployed associations, they were grateful to have found any paying job; like in most low- or middle-income countries the informal sector provides the best options. If interviewees complained, it was usually that Careem charges 20-25% of all ride fares. Questions about missing social benefits were shrugged off. Drivers can voluntarily register with Jordan’s Social Security Corporation but less than 2% did.
During the pandemic lockdown only a tiny fraction was eligible to apply for cash assistance and although the Central Bank of Jordan recommended banks to postpone private customers’ loan repayments, only some followed through. In May 2020, Careem cut its staff across the Middle East by 31% due to an 80% loss of business. Many captains struggled with unpaid car loans and by 2021, several of them had been forced to sell their cars and quit their jobs. Careem’s pool of drivers massively shrunk and those still offering their services request cash instead of credit-card payments to immediately cover their expenses. The sudden drop in business caused by the lockdowns thus underlines the precarious nature of platform work, much to the detriment of customers and platform operators but, especially, of the registered drivers. Fairwork Foundation, campaigning for decent work in the platform economy, estimates that 50 million platform workers globally had been adversely affected by the Covid-19 pandemic, either by losing their jobs or on average two-thirds of their income.
Regulators’ arbitration between taxi drivers and Careem captains
After 2015, Uber’s and Careem’s services in Amman grew at first unregulated and quickly. Like in other countries experiencing the fast growth of the ride-hailing business, taxi drivers faced fierce competition. Their usual monthly income about halved and taxi medallions quickly lost in value. In 2016, over 1,200 taxi drivers protested against unfair competition and low fares. Traffic police impounded Careem and Uber cars and fined their drivers, who were accused of violating Jordan’s Public Transport Law. Reportedly, Uber refunded drivers the fines and a share of foregone income. This quick growth and subsequent taxi driver protests also mirror Jordan’s ruling monarchy’s gradual disconnect to its traditional power base: platform owners are said to be very close to elite and royal circles in Jordan, so state support for traditional taxi drivers slackened and led to protests.
To counteract these protests, regulators eventually reacted in two steps: In 2017, Careem and other ride-hailing operators received preliminary licences by the Land Transport Regulatory Commission (LTRC). Simultaneously, both Careem and Uber attempted to calm taxi drivers’ hostility by including a number of yellow taxis on their app. By mid-2018, regulators handed out regular licenses, yet setting a maximum at about half of already app-registered drivers. Regulators thus struck a compromise, curbing both ride-hailing operators’ uncontrolled growth and taxi operators’ previous monopoly position, to enable fairer competition. To halve its registered captains from 11,000 to 5,500, Careem told captains to re-apply on a first come first served basis and a surplus drivers found their accounts deactivated. Some of the laid-off captains found a new job in Careem Box, a delivery service launched in late 2018.
Regulators not only set a maximum number of licences, they also kept ride-hailing apps in an upscale line of business. They barred Careem from offering bus services or cars with small engines. Careem’s managerial staff described Jordan as fairly difficult regulatory environment in regional comparison, for instance, more complicated than most GCC countries. “We are one of the biggest […] providers of income in Jordan […but] the government has not yet seen us as that. […] To me, they are not even concerned about the money they can make from the licenses [400 JOD per licence], it’s more for them to avoid pressure from the taxis and the unions.” Working conditions were not part of the negotiations.
Regulators thus reinforced a labour market segmentation, but they still could not fully eradicate the competition between Careem and taxi drivers. While customers are willing to pay higher ride fares for the better, digitally enhanced ride-hailing service, the actual work of captains and taxi drivers is very similar, at unequal pay.
Regulatory side-effects? Crowding out and deskilling
Confined to providing an upmarket service, Careem earned higher ride fares and its captains earned better than in other jobs. This led to crowding out because income opportunities drew people from other jobs into the ride-hailing business and made highly-skilled job-seekers apply to Careem rather than to a job vacancy in their own field of specialisation. This crowding out reflects just how poor alternative job opportunities are in both Jordan’s informal and formal private sector. Captains constitute a new peculiar set of outsiders to Jordan’s labour market dualization, equally informal and vulnerable as taxi drivers but earning a higher income and benefitting from a prestigious modern image. This introduces a new layer of ‘privileged outsiders’ in comparison to other outsiders and to insiders in public sector jobs (similar to new insider-outsider divisions in the Gulf as discussed by Steffen Hertog in this volume).
Seen by skill level, captains take over jobs that could be filled by less skilled persons. If captains work outside their actual professional field, it leads to – as one interviewee put it – “a misuse of skills” and deskilling. Highly-skilled persons in unskilled or low-skill jobs gain no additional work experience, they neither apply their skills nor learn about new developments in their respective field. Captains use basic digital tools but gain hardly any digital skills helpful toward a future career. Such deskilling blocks individuals’ career choices and has adverse effects on a country’s stock of human capital. Furthermore, anecdotal evidence suggests that, rather than reducing brain drain, platform-earned income provides a means to enable emigration.
Yet, driving for Careem has positive effects on skills and productivity if it helps to bridge income gaps while captains pursue their professional career as part-timing students or freelancers waiting for new assignments. However, problematically, low-skill drivers or student part-timers were less common in Amman than at ride-hailing platforms workers elsewhere. The requirement of owning a well-kept car constitutes both a barrier to entry and a lock-in effect pushing captains to stay longer in this low-skill job than they would otherwise do.
On a cursory glance, the case study of Careem in Jordan’s capital is largely in line with other international experiences with ride-hailing platforms. It reflects the same steep growth, fashionable image, informal work arrangements and precarious working conditions. As the income losses during the Covid-19 pandemic painfully showed, Jordan’s Careem captains are equally risk-prone as their global colleagues. Yet, in contrast to dumping prices and low earnings of platform drivers elsewhere, as of 2019, Jordan’s captains earned quite well and their experiences were rather positive. In that sense, Jordan could be seen as a positive regulatory example.
Yet, to protect taxi drivers against large-scale competition and perhaps to divide-and-rule different constituencies in the transport sector, regulators spurred a price differentiation between mobility choices, which helped to create a niche for and by the middle classes. By licensing ride-hailing platforms as an upmarket choice, Jordanian authorities alleviated the employment crisis and to a degree placated middle class members threatened by downward social mobility. Their approach, however, built on short-term wins and informal work arrangements, did not tackle but aggravate long-standing labour market shortcomings and inefficiencies. Highly-skilled persons were drawn from their professional fields into jobs that could be done by less skilled persons – if only the latter had the means to afford the loan for a modern, medium-size vehicle. The ‘split’ between Careem as a middle-class transport service and cheaper taxi services was deepened by regulators. Regulators chose a way of least resistance, creating additional jobs and mobility choices but unloading risks onto the workers themselves.
In Jordan – as in many middle-income economies – there is a lack of decent, well-paid formal jobs. Under these circumstances regulators had the choice between bad and worse: Had they banned ride-hailing businesses altogether, they would have forgone jobs and income for drivers and a safe, reliable and convenient transport service for passengers. They chose to license ride-hailing, but in a way that avoids job losses by taxi drivers. By doing so, however, regulators segmented the Jordanian labour market and upset wage levels and incentives for the highly-skilled.
 Platform economy is a neutral term purely describing the technical intermediation and thus will be given preference over gig economy, sharing economy or collaborative economy.
 The driver sample consists of 99 encounters, 70 with captains, 25 with taxi drivers (11 of them also registered on the Careem app) and 4 with Uber drivers. Sampling was random since potential interviewees were approached after app-ordering a Careem service or hailing a taxi on the street.
 Global market leader Uber was created 2009 in San Francisco; Careem 2012 in Dubai. In 2019, Uber bought Careem for 3.1 billion USD but stayed independent brands after the merger entered into force in 2020.
 In 2020, Covid-19 lockdowns made the unemployment rate jump to an estimated 25%. Economic Intelligence Unit, “Country Report Jordan” (London, 5 March 2021).
 International Labour Organization, ILOSTAT database (2019) https://ilostat.ilo.org/data/;
Mona Amer, School-to-work transition in Jordan 2010-2016 (ERF working paper 1196, Cairo, 2018), 12.
 Staff interview, 2019, Amman.
 In comparison to existing taxi services, app-registered cars tend to be more environmentally friendly; the vast majority of the interviewed captains drive hybrid cars. In the short run, urban authorities see ride-hailing platforms as helpful in reducing carbon emissions.
 Alex Rosenblat, Uberland: how algorithms are rewriting the rules of work (University of California Press, 2018), 37.
 International Labour Organization, Global Wage Report 2020–21: Wages and minimum wages in the time of COVID-19 (Geneva, 2020), 176, 186.
 Estimating detailed expenses is difficult; see Janine Berg and Hannah Johnston, “Too good to be true? A comment on Hall and Krueger’s analysis of the labour market for Uber’s driver-partners.” ILR Review 72, 1(2018): 39-68.
 Interviews with captains, 2019, Amman.
 Staff interview, 2019, Amman.
 Rosenblat, Uberland, 51.
 Mona Amer “The School-to-Work Transition of Jordanian Youth” in The Jordanian Labor Market in the New Millennium edited by Ragui Assaad (Oxford University Press: Oxford, 2014): 64-104.
 Berg and Johnston, ILR Review.
 Irene Weipert-Fenner, “Unemployed mobilisation in times of democratisation: the Union of Unemployed Graduates in post-Ben Ali Tunisia.” The Journal of North African Studies 25, 1(2020): 53-75.
 Staff interview, 2019, Amman.
 International Monetary Fund, IMF Policy Tracker. Policy Responses to COVID-19 (2020) https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#J; interviews with customers, 2020.
 Arabian Business, “Careem to lay off 31% of staff as business drops 80% amid Covid-19,” 5 May 2020.
 Interviews with customers, 2020.
 Fairwork Foundation, The Gig Economy and Covid-19: Fairwork Report on Platform Policies (2020) https://fair.work/en/fw/publications/the-gig-economy-and-covid-19/
 Interviews with taxi drivers, 2019, Amman.
 Olivia Cuthbert, “Jordan cracks down on Uber and Careem as congestion clogs its capital.” The Guardian 18 November 2016.
 Interviews with customers, 2019, Amman.
 See e.g. Sean Yom, “Bread, Fear and Coalition Politics in Jordan” in Economic shocks and authoritarian stability: Duration, financial control, and institutions edited by Victor C. Shih (University of Michigan Press: Ann Arbor, 2020): 210-235.
 Interviewed app-registered taxi drivers switch between both services depending on traffic and ride fares. They tend to switch off the app during rush hours, just serving customers from the streets. During evening hours, when most people are at home and few hail taxis from the road-side, using the app saves waiting time and petrol-guzzling street cruising.
 The competition indeed incentivised cab drivers to provide a better and friendlier service and cleaner cars. For instance, several taxi drivers formed ghad sirri (Arabic: quick answer), a lose association coordinating via WhatsApp to guarantee quick pick-up of phoning-in customers.
 Not competing with passenger transport, the regulations did not apply to Careem Box. By mid-2019, when it had 1,000 captains, an agency affiliated with the Ministry of Telecommunications investigated for unlicensed competition with postal services. Staff interview, 2019, Amman.
 Staff interview, 2019, Amman.
 Interviewed Careem and taxi drivers reported occasional aggressive behaviour, ranging from cutting into each other’s ways to outright brawls. Many interviewed taxi drivers emphasised their own professionalism and experience, while pointing to app-registered drivers’ lower-class driving licence and car insurance coverage.
 Melodena Stephens, “Careem: Taking a Local Problem-solving Approach to the Sharing Economy” in Future Governments edited by ibid. (Bingley, UK: Emerald Publishing Limited, 2019), Vol. 7: 347-365.
 There is, however, a methodological bias since only active captains could be approached for interviews, not those whose accounts had been deactivated in 2018 or who for other reasons had to quit their Careem job.