Gig work has always been around. Why is it controversial now?

The ‘gig’ economy has matured to a large extent in the last decade especially after the onset of platforms like Ola, Swiggy, Dunzo, Uber, UrbanCompany among others. And today, 200 million people are known to be a part of the workforce. So, let’s find out the potential and pain points involved in it.

 

You must have heard the word ‘gig’ thrown around at parties, overused by musicians and ‘industry pundits’, and interchangeably with concerts too. However, lately, the COVID-19 pandemic has spurred the reach of gig work and it has become crucial in transforming India’s withering economy amidst the health crisis. It may seem like gig work is a recent reality, but it has existed for nearly a century.


The term ‘gig’ coined by jazz musicians in the US in 1915, according to some sources, was used to define temporary jobs. From the worker’s perspective this meant a job that was flexible with respect to time and amount of work; and from the employer’s perspective it meant the deployment of lesser resources when it comes to training and recruitment. The term gig economy wasn’t popularized until the 2008-2009 financial crisis, when swaths of people began facing unemployment and underemployment in the US. The need to hold down as many jobs as possible to shore up incomes galvanized the gig economy.


Gig economy in India

Enabled by technology, gig work puts flexibility at the centre. Still in its nascent stages, the Global Gig Economy Index report ranks India among the top 10 countries, indicating an increase in freelancers from 11 percent in 2018 to 52 percent in 2019.


According to a report by Boston Consulting Group, “Gig work is not a new concept in India. With its large informal economy and ‘casual workers’ segment, India has always had an equivalent of gig work across urban and rural areas - from temporary farm workers to daily-wage construction laborers to household helps.”


Representational image (Image credit: Trak)

Nonetheless, with the rise of the platform economy, the report adds that the “most visible spaces of activity in India’s gig economy have been in personal transport, last-mile delivery, and at-home personal services. The key players include Uber and Ola, Swiggy, Zomato, Delhivery, Dunzo, and Foodpanda, Urban Company, Housejoy, Handy, and Mr. Right, as well as others such as Portea, and FlexingIt and Upwork.”

Propelled by the pandemic, workers around the world became acutely aware of the lack of stability and income assurance in traditional work. Gig platforms began playing a crucial role in ensuring work and steady income. The gig economy in India is slated to grow and serve upto 90 million jobs and also add up to 1.25 percent to the nation’s GDP in the long run, according to the same BCG report.


The estimated potential however does not necessarily consider the unsustainability of incomes, degradation of work as well as rights of workers more so since they have not found a place in the labour laws of the country.


The unrest in India’s gig economy

Platforms are the centre of India’s economic revolution. Digitisation of services in finance, agriculture, education, logistics and retail are expected to reach a value of $500 billion by 2025 (currently valued at $170 billion), as per a report by the McKinsey Global Institute. In another report by the Ola Mobility Institute (OMI), the platform-based model of earning resulted in 57 percent of the respondents in the report earning upto Rs 1,000 a day with the other 43 percent garnering more than that. This is 25 percent more than non-platform workers (these numbers are from 2019).


No doubt these numbers speak for themselves and the rising gig economy in India; that’s not where the story ends though - dumped by the pandemic, several business models were rendered ineffective, many startups were forced to lay off employees and the trickle down was felt most harshly by gig workers. Throughout 2020, gig workers employed with platforms like Swiggy, Zomato, Ola and Uber, protested against the companies’ policies and a fall in minimum pay.


Protests by gig workers in Delhi NCR (Image credit: AIGWU Twitter)


A report by Fairwork India, which ranked labour standards of startups in India, ranked Zomato, Swiggy and Uber an abysmal 1 out of 10 for poor working conditions. Ola and Uber drivers also protested against the 20-25 percent commission charged on the fare of each ride. Base fares for these rides continue to be low and unsustainable owing to surging fuel prices.


More recently, Zomato was called out for its tone-deaf ad that twitterati has deemed as ‘glorification’ of delivery executives. Twitter has become the poster child platform for protest and delivery executives are leveraging it to voice their struggles.


Besides Twitter, several news reports also indicate a massive drop in pay for delivery executives, almost to the tune of 60 percent thereby receiving only Rs 15 to 20 per order. Despite Swiggy and Zomato reporting increasing unit economics, diminishing discounts and charging for delivery, some executives reported that it has not translated to disposable income for them. Most of them earned a maximum of Rs 12,000 to 15,000 a month after working 12 hours a day and six days a week.


Protecting gig workers

Unlike people employed with e-commerce firms that have a fixed basic pay, predictable timings and are more or less permanent on the payroll with third-party firms that have contracts with e-commerce companies, people working with platform apps are paid per delivery and are not eligible for minimum pay.


Earlier this year, the Finance Minister, Nirmala Sitharaman, proposed extending social security schemes to workers employed in the gig and platform economy. However, they have no legal protection within the labour law framework of India - gig workers don’t fall under the category of an ‘employee’ or ‘worker’. For instance, a delivery executive working with Swiggy earns about Rs 30 for a delivery, however there is no written contract stating this and he/she can pull the plug on the task when he/she wants to. Of course, this works for companies because once they take people on-board as employees, they are entitled to benefits like gratuity, insurance, mediclaim, etc.


Gig worker strikes have not been in vain though. Some of these strikes have necessitated a conversation, sometimes even government interventions and political mediation. When Ola and Uber drivers went on strike over unfair pay in Mumbai, way back in 2018, the then Chief Minister of Maharashtra, Devendra Fadnavis, had assured a solution that would make the market more transparent for drivers and commuters. However, little has been heard about it since.


There’s a long way to go to ensure the best interest of gig workers and this would require sustained political perusal. The gig economy in India, an estimated $445 billion industry by 2024, is in dire need of regulatory intervention. After all, if technology and businesses can’t put worker rights front and centre, then there is little justification for their inception at all.

 

Story by Aparna Chandrashekhar (Team Cityscope)

Edited by Roshni Shroff

Cover image illustration by Pratyush Thaker

 

Some video resources to help you learn more on gig economy -