Dubai is a paradise for “digital nomads”— and hell for low-wage gig workers

These days, anyone with a laptop, a Wi-Fi connection, and a robust bank account can work from Dubai. The city’s government website suggests that working remotely from the desert city is practically vacation-like: Advertisements featuring a woman laughing behind her laptop next to a pool give the impression that you can swim laps between Zoom calls, and enjoy the seamless benefits of a city filled with app-based amenities. The image is convincing: More than 55,000 people have been attracted to the luxury amenities and frictionless lifestyle of the United Arab Emirates and moved to Dubai over the course of the pandemic. 

In late 2020, the UAE opened up a new category of work permits for freelancers who make at least $70,000 a year, typically in white-collar fields like legal consulting, software design, and public relations. The new permits are the latest in the Gulf state’s incentives aimed at attracting expat professionals to its cosmopolitan areas, where foreign workers make up almost 90% of the workforce. 

But while the UAE’s government courts digital nomads, blue-collar gig work like food delivery or rideshare driving operates in a legal gray area there — although the services are available, they are technically illegal. While blue-collar workers are dependent on the companies which sponsor their visas, professional freelancers in the approved sectors can pay a few thousand dollars to have their paperwork taken care of by freelancing support services and then be free to work whenever and wherever they like. It means that the gig labor model that enables so-called digital nomads to benefit from on-demand services puts the UAE’s gig laborers working under the same restrictive conditions of traditional migrant work. As white-collar freelancers flock to the UAE under the latest work permits, gig laborers, often from poorer countries in South and Southeast Asia, are being crushed under the weight of difficult disadvantages.

Michele Johnson knows all about navigating the UAE’s evolving visa policies for both white-collar professionals and gig workers alike. Originally from Texas, Johnson worked a decade in human resources for major international corporations, helping foreign workers relocate to the Gulf. Eventually Johnson and her husband settled in Dubai and opened their own restaurant in the trendy Jumeirah Lake Towers area. They had previously dreamed of opening a pizza place when they lived in Kuala Lumpur. “But we thought it was too big of a risk to take in a place where things were not very progressed with expats setting up businesses,” said Johnson. “Then my job took us [to Dubai], and then we found a whole different environment. We found an environment that’s very friendly to expats.” 

To deliver hundreds of daily orders for her New York-style thin-crust pies Johnson employs four delivery drivers directly. She hires an additional four from a courier agency, and her company has an exclusive partnership with food aggregator Deliveroo. Johnson is responsible for visas and insurance for the drivers she employs herself. “It works out to be slightly cheaper with [the courier company] than with your own drivers, when you add up all the different costs of actually employing someone,” she said. 

All foreigners need visas to live and work in the UAE, and most visas are tied to employers. That means delivery drivers and other on-demand workers can’t be independent contractors without formal employment contracts, unlike most gig workers elsewhere. So drivers for ride hailing and delivery companies like Deliveroo are often officially employed by taxi, limo, and courier agencies. The agencies get these workers residence permits and work visas, and often provide housing and arrange for vehicle leases — while often retaining half of workers’ paychecks and sometimes their passports in exchange.

This employer sponsorship requirement is meant to ensure that workers in the UAE receive their due time off and health insurance. In reality, it often means that workers’ take-home wages are far lower than what they could make for the same work in a different country.

Because delivery platforms like Deliveroo and Careem don’t employ gig workers directly, drivers and other blue-collar workers rely on their sponsoring company for protection on the job. During the pandemic, thousands were forced to return home as their wages plummeted and housing was sometimes revoked.

Both of 23-year-old Syed Zain Ali Jaffri’s roommates went back to their native Pakistan this way. Jaffri moved to Dubai in 2017 and has been working as a driver for Uber and Careem ever since. Pakistanis are among the largest group of expats working in the UAE — more than 1 million people according to pre-pandemic government statistics. 

Expenses for migrant drivers like Jaffri add up fast. On top of taxes, drivers pay a cut of their wages to the taxi companies that sponsor them. They also lease their own cars. Before the pandemic, Jaffri was making as much as $4,000 (around 15,000 dirhams) a month. More than half of it went to his monthly car payment. After the government tax and the cuts to the taxi company which sponsors his visa, he could sometimes send as much as $800 a month home to his family. 

When the pandemic hit, Jaffri’s monthly income immediately fell to under $1,500. As more restrictions were put in place, it dropped by half again. Jaffri and his roommates fell behind on their exorbitant car payments, all while they worked to keep sending income back to their families in Pakistan. The banks were lenient until September, said Jaffri, but then they came calling. 

“We are under debt because we were sending all of our money to our families,” Jaffri told Rest of World. He said he still owes about $19,000, mostly to the bank for his car payment, and to his friends who loaned him money to stay afloat. “The people who were driving vehicles came under debt, they couldn’t pay the installments,” he said. “They kept their money because there was no income and gave nothing to companies and banks.” 

Jaffri said Careem and Uber did little to alleviate their sudden drop in income. In May 2020, when lockdown restrictions were eased, “Careem gave us a package with flour, lentils, oil, and tuna,” Jaffri said. “Uber gave us nothing.”  

Though Jaffri remains in Dubai, his roommates, each facing upwards of $12,000 of debt, had no choice but to sell their cars, cancel their visas, and return to Pakistan. 

Muhammad Atif, an importer-exporter who lived in Dubai for 25 years before returning to Pakistan during the pandemic, said things were so bad in the city’s tourism industry that some companies without money coming in let foreign workers unofficially freelance. “If you get fired then you have to go back to your country,” said Atif. “But some companies said, we are not firing you, you have an active visa, go search for another job. That’s the best thing we can do because we can’t pay you anymore.”

After strict lockdowns devastated businesses in 2020, Pakistan’s ambassador to the UAE told CNBC that as many as one in three Pakistanis working in the UAE had returned home. 

Meanwhile, white-collar tech workers do not face the same constraints as their blue-collar gig worker counterparts: Freelancers in approved professions like web design and marketing are not restricted by being tied to the success, failure, or requirements of an employer. Dozens of entities can grant work licenses for freelancers in approved professions, and new categories for tech workers have expanded along with the UAE’s position as a regional tech hub. 

“There’s definitely an agenda from the UAE government to attract talent to move with the economic forces, to move with what people want, which is more flexibility,” said Luke Tapp, partner specializing in employment at Pinsent Masons. “It’s not aimed at particular nationalities as much as people in particular sectors.”

“The UAE can be very forward-thinking when it comes to inviting people to try things and to start things,” said Courtney Brandt, who has been freelancing as a content creator in Dubai for five years. Brandt knows Johnson from her work as a food blogger. But as a podcast producer, social media personality, and author, Brandt said there’s really no authority to decide which kind of permit she needs. She previously held the UAE’s social media licence, and now works under the freelance permit. But she said no one checks her paperwork.

“I’m operating under my husband’s sponsorship, but I have the permission to work legally under this freelance permit,” said Brandt.  “I cannot stress enough how much no one has asked me for it.” Brandt said she knows many expat women who work as professional freelancers and reside in the country on their husband’s sponsorship, and the assumption that she is as well may explain why she’s never asked for her paperwork.

Startup incubator co-founder Diala Daoud said that as the UAE’s tech scene continues to grow, e-commerce platforms are the top type of company she sees being founded in the region, in part because of the existing low-wage delivery workforce. “The whole logistics space, and how everything is set in place, made it way easier,” said Daoud, who relocated from Lebanon in 2019 to found startup incubator Launch DXB. “From the payment gateways, to the delivery handling to the logistics to everything, it made it way easier for people to set up their companies here.” 

To keep costs down, Daoud said many of the startups she works with are shifting toward contracting with platforms that provide gig workers. “Why hire your own people?”