EconomyDubai’s workers struggle with cost of living crisis

Dubai’s workers struggle with cost of living crisis

On any normal weekday, Dubai’s food delivery riders would be up and out early, but in recent days, banks of motorbikes have been parked outside their budget dormitories. “They are all sleeping,” said one doorman in Bur Dubai, the central district where many cram into apartments.

Food delivery riders for Talabat, a unit of Germany’s Delivery Hero, have gone on an illegal strike to protest over their low wages as the rising cost of living sparks widening unrest among the poorest workers in the Gulf entrepôt, a playground for some of the world’s richest people.

The rare outbreak of industrial unrest in the Gulf state comes as fuel prices have soared since the Russian invasion of Ukraine. This has slashed the take-home pay of riders, who purchase their own petrol. With inflation hitting other products such as food, living standards are declining for workers who eke out a living on slim salaries.

“The salaries are too low and petrol is too high. This is a problem — everyone stopped work,” said one rider at Talabat, who did not want his name to be published. Last year he “made Dh2,500 ($681), now it is Dh1,500 [a month].”

The Talabat walkout, which has hobbled the app’s service in the country, comes after a strike this month in Dubai by employees of rival operator Deliveroo prompted the UK-based firm to drop plans to cut salaries and extend working hours.

Talabat riders have called for an increase in their basic pay from Dh7.50 per food order to Dh8 or Dh9. The company said it was open to discussions “through the right channels, and in a constructive way”.

Talabat, which uses 20,000 riders nationwide, said riders had gross average earnings of about Dh3,500 a month, with about 70 per cent of riders up until last week expressing satisfaction with their pay. “Yet, we understand economic and political realities are changing constantly, and we will always continue to listen to what riders have to say,” it said in a statement.

Strike action and unionised labour are outlawed in the UAE, where the authorities are quick to snuff out any display of dissent, whether related to politics or economic conditions. From construction to retail, migrant workers form the backbone of Gulf economies, most of whom travel from south Asia with the aim of remitting funds back to their families.

“To strike in the UAE things have to be desperate, so this is a sign of how difficult things have got for delivery drivers with recent fuel cost rises,” said James Lynch, a founding director of FairSquare, a human rights research group.

One rider, who pays Dh300 a month for a bedspace in a room shared with 11 others, said desperation over the cost of living crisis overshadowed their concerns about potentially breaking the law. “We aren’t blocking the roads,” he said. “We are just staying home.”

Over the years construction workers have staged intermittent strike action and taxi drivers have also been known to stop work in protest at conditions. Dubai police riot squads have broken up or threatened such protests and the leaders of strike action have previously been deported.

The labour protest comes as broader economic activity in the UAE surges, thanks to an influx of new residents since the pandemic started, the entry of wealthy Russians since the Ukraine war broke out and sky-high oil prices that have boosted the Gulf’s hydrocarbon-dependent economies. This new demographic of high rollers, including rich expatriates and cryptocurrency billionaires, has supported the market for property, luxury retailers and high-end restaurants across the city.

But the blue-collar majority of Dubai’s 3.5mn population are struggling. Long queues have appeared outside petrol stations on the eve of government price rises, which are set every month in line with global prices. Monica Malik, chief economist at Abu Dhabi Commercial Bank, forecasts inflation rising to 3.9 per cent this year from a forecast 0 per cent in 2021.

While subsidies on utilities and food have helped limit the impact, “the sharply higher energy prices are feeding through and impacting household spending patterns,” she said. Previously low inflation before the pandemic means price rises are now more keenly felt. Petrol, for example, has risen 87 per cent since 2017 while the price of milk is up 50 per cent over the same period.

Many riders, not just those at Talabat, say that the decline in their take-home pay is a blow to their families in south Asia who depend on their remittances and also face rampant inflation.

“Our work is too dangerous and hard — I can’t walk at the end of my 14-hour shifts,” said Mohammed, a striking Talabat rider on Thursday. “But God decides when I die and will provide.”

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