Gig Economy in India

Why Gig Economy in the news?

The 2024 Fairwork India Ratings report analyzes the evolving landscape of platform work, highlighting how these platforms are increasingly dictating the timing and duration of gigs for workers.

Titled “Fairwork India Ratings 2024: Labour Standards in the Platform Economy,” this report represents the sixth consecutive annual evaluation conducted by the Fairwork India Team. It is a collaborative initiative by the Centre for IT and Public Policy (CITAPP) at the International Institute of Information Technology, Bangalore (IIIT-B), in partnership with Oxford University.

What’s covered in this article

• Overview of the Gig Economy

(definition, gig workers, economic size, average income, challenges, etc.)

• Summary of the report’s key findings

What is the Gig Economy?

The gig economy refers to a free market system where organizations hire or contract workers for short durations.

In essence, the roles are temporary and designed to fulfil specific needs of the company through short-term engagements.

In India, startups such as Ola, Uber, Zomato, and Swiggy have emerged as the primary drivers of the gig economy.

Who is a Gig Worker?

As per the Code on Social Security, 2020 (India), a gig worker is defined as someone who engages in work arrangements and earns income from such activities, independent of the traditional employer-employee dynamic.

Gig workers encompass various roles including independent contractors, online platform workers, contract employees, on-call personnel, and temporary staff.

What is the Size of the Gig Economy in India?

• A study by NITI Aayog, titled “India’s Booming Gig and Platform Economy,” estimates that approximately 47% of gig jobs currently fall under medium-skilled categories, while around 22% are high-skilled, and 31% are low-skilled.These statistics underscore the significance of the gig workforce within the Indian economy.

Investing in the comfort and security of this community is crucial for fostering a more progressive and prosperous future.

• Various studies indicate that participation rates in the gig economy are higher in developing nations (5-12%) compared to developed countries (1-4%).Most of these jobs are concentrated in lower-income sectors, including delivery services, ridesharing, microtasks, and care and wellness roles.
• Further estimates suggest that there were about 7.7 million workers engaged in the gig economy during 2020-21, with projections indicating that this workforce could grow to 23.5 million by 2029-30.

What is the Average Age/Income of Gig Workers in India?

• The median age of gig workers in India is 27 years, and they earn an average monthly income of ₹18,000.
• Notably, around 71% of these workers are the primary earners for their families, and they typically belong to households averaging 4.4 members.

Challenges Faced by Gig Workers:

Although platform companies have created new employment opportunities, many workers face challenges such as low wages, unequal gender participation, and limited chances for upward mobility within their organizations.This situation has sparked protests among workers at various companies, including Swiggy, Zomato, Ola, Uber, and Urban Company.

Gig workers are usually hired on a contractual basis and are not classified as employees, which means they miss out on several benefits typically afforded to full-time employees.

Consequently, they often do not receive entitlements like paid sick leave, casual leave, travel and housing allowances, and provident fund contributions.

What Needs to Be Done to Improve the Living Standards of Gig Workers?

• Fiscal Incentives:
  • The NITI Aayog report on “India’s Booming Gig and Platform Economy” suggests implementing fiscal incentives, such as tax breaks or startup grants, for businesses that create employment opportunities with significant female representation.
• Retirement Benefits:
  • The report also advocates for companies to develop policies that provide retirement benefits and insurance coverage for unforeseen events, such as the Covid-19 pandemic.
  • These measures could be aligned with the provisions of the Code on Social Security, 2020.
  • Companies should consider offering income support to workers, which is essential for providing assured minimum earnings and social security in the face of job uncertainty or irregularity.
  • Additionally, it recommends offering paid sick leave and insurance coverage to workers.

Case Study: The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023:

• • The Rajasthan State Assembly has enacted the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023.
  • This legislation establishes a board tasked with ensuring the registration and welfare of gig workers, addressing their vulnerabilities, and facilitating collective bargaining and negotiations.
  • The board is designed to function as an independent grievance redress mechanism.
  • Moreover, the Act includes provisions for establishing a social security fund, financed through fees collected from each transaction.

Fairwork India Ratings 2024 Report:

The Fairwork India Ratings 2024 report assesses the working conditions of platform workers across various digital platforms in India.It reveals that many platforms fail to guarantee that their workers earn a local living wage and generally resist acknowledging worker collectivization efforts.

The report also explores potential legislative reforms for gig workers in states such as Karnataka and Jharkhand.

Key Findings of the Report:

Overall Ratings:

• • No platform scored higher than 6 out of 10 in the evaluation.
  • The assessment focused on five core principles:

Fair Pay, Fair Conditions, Fair Contracts, Fair Management, and Fair Representation.

Assessment of Fair Pay:

• • Only Bigbasket and Urban Company earned the first point for Fair Pay by providing a minimum wage that meets at least the local minimum wage after accounting for work-related expenses.
  • No platform secured the second point, which requires evidence that workers earn a living wage after deducting work-related costs.

Evaluation of Fair Conditions:

• • Platforms like Amazon Flex, BigBasket, BluSmart, Swiggy, Urban Company, Zepto, and Zomato were recognized for supplying safety equipment and training.
  • Additionally, BigBasket, Swiggy, Urban Company, Zepto, and Zomato were commended for providing accident insurance and compensation for income loss due to health-related issues.

Fair Contracts:

• • BigBasket, BluSmart, Swiggy, Urban Company, Zepto, and Zomato received points for ensuring that contracts are accessible and transparent.
  • They also have protocols in place to protect worker data.

Fair Management:

• • Companies like Amazon Flex, BigBasket, BluSmart, Flipkart, Swiggy, Urban Company, and Zomato offer mechanisms for workers to appeal disciplinary actions.
  • BluSmart, Swiggy, Urban Company, and Zomato conduct regular external audits to prevent bias in task assignments.

Fair Representation:

• • Despite the rise of worker collectivization in the past six years, none of the platforms showed evidence of recognizing collective worker bodies or unions.

Implications & Future Prospects:

• The Fairwork India Ratings 2024 report highlights the increasing focus on gig economy and gig worker welfare in political and legislative conversations.
• However, it also raises concerns about the slow implementation of necessary changes.
• The report advocates for a collaborative approach where platform companies, governmental bodies, and worker collectives come together to enhance living standards and working conditions for gig workers in India.
• Ultimately, the report serves as a vital reminder of the ongoing challenges faced by gig workers and the existing gaps in ensuring fair working conditions across India’s digital labor platforms.

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