Author- Vaibhavi Rai
Co-Author- Yashika Pant, Anshika Bantwan, Kumar Nagarjun
Abstract
This paper examines the economic, social, and legal vulnerabilities of platform-based gig workers in India. The first part of this paper covers the gig economy in the Indian context, its historical progression, and its impact on employment generation. In the second part, the paper highlights the susceptibility of platform-based gig work- giving an account of its economic fissures, welfare gaps, and occupational hazards, and reflects on the inadequacy of existing legal measures. The paper outlines the policy gaps by analyzing policies in place and comparing them globally. In the third part of this paper, the paper preferences particular solutions and insists on the joint responsibility of the government and platform companies to create adequate work conditions and worker protection for gig workers.
Methodology – The study uses qualitative, secondary research and peer-reviewed open-access resources.
Literature Review
The development of platform-based work has changed the global labor force, particularly in the gig economy, where delivery personnel are undertaking tasks under digital platforms like Uber Eats, DoorDash, and Swiggy. Economically, scholars have contended that gig labor presents possibilities for earnings while characterized by insecure work, unstable earnings, and lack of social security coverage (Kalleberg, 2018; Veen et al., 2020). Some studies have shown that platform work offers flexibility and access to marginalized groups, but excessive commission fees and operational costs offset these benefits (Koutsimpogiorgos et al., 2020; Rosenblat & Stark, 2016). Algorithmic management socially affects workers’ lives by creating ambiguous rating systems, algorithmic deactivations, and performance monitoring, which lower autonomy and increase job insecurity (Wood et al., 2019). The absence of traditional workplace structures also further isolates gig workers, preventing them from having any kind of organization and labor movement to demand better conditions (Healy et al., 2017). Legally, the independent contractor status of gig workers over that of employees is at the core of the issue, as it prevents platforms from providing basic labour rights such as minimum wage, health benefits, and collective bargaining (De Stefano, 2016). While certain rights have been extended to gig workers by some legal frameworks, such as the UK Supreme Court ruling in Uber BV v. Aslam (2021), others, such as California’s Proposition 22, codify their independent contractor status (Cherry & Poster, 2021). With platform-based labour continuing to expand, scholars point to the need for legal
Keywords – Gig economy, Platform-based work, Labor protection, Welfare
1. Introduction
The gig economy has become an indispensable part of daily life. They are ubiquitous and perform a myriad of services from food delivery to cab drivers and at-home services providers. It is defined as “a system of employment that relies on temporary, flexible jobs performed by independent contractors or freelancers, rather than full-time employees” (Kalleberg and Dunn, 2016).
The term “gig” originally came from the music industry where musicians performed in bars or cafes, which are known as “gigs.” Through the advancement of technology and the birth of digital platforms, other kinds of jobs such as this have developed. The gig economy, facilitated by digital service platforms such as Ola, Uber, BigBasket, Zepto, Zomato, and Urban Company, has increased a lot, and they largely depend on gig-based, on-demand labor.
1.1 The gig economy in India
India’s dependence on gig work is only growing, and millions of jobs are created by such work across demographics. The NITI Aayog 2020 report on the gig economy in India predicts that by 2030, the sector will create jobs for 23.5 million (2.35 crore) current workers, thus contributing a projection of 6.7% of the non-agricultural workforce. The transport sector alone is projected to generate around 1.3 million (13 lakh) jobs by 2030.
India’s gig economy is generating new jobs ranging from unskilled to semi-skilled jobs with the promise of flexibility, autonomy, and the potential for financial freedom. However, it comes with some serious disadvantages such as job security, fair earnings, and social protection, signifying the legal vulnerabilities of platform-based workers. Income for gig workers is highly unstable due to demand fluctuation and being deprived of having regulated base pay. Since they are independent contractors and therefore are excluded from all labor laws, minimum wages, social and retirement security, and appropriate dispute resolution.
2. Economic Dimensions and Policy Solutions for Gig Economy Workers in India
The gig economy has significantly changed the nature of labor in India, offering diverse opportunities for employment on one hand and financial instability and wage fluctuations on the other. Unlike traditional employment, gig work does not have a guaranteed wage, which makes workers vulnerable to fluctuating incentives and increased costs associated with vehicle maintenance, fuel, and medical expenses. The research highlights that 77 lakh gig workers use this type of employment as their primary source of income; however, many occupy over 16 hours a day to survive.
The compensation in the gig economy is fixed on a task-oriented model where the incentive largely governs the reward. To begin with, ride-hailing companies like Uber and Ola formerly provided incentives; however, these incentives have come down drastically over time, forcing workers to work long hours at reduced pay. Second, the characterization of gig workers as independent contractors deprives them of protection under minimum wages, health cover, and pensions. The lack of a juridical buffer enhances economic insecurity, rendering money planning a challenge for gig workers. Financial insecurity is the biggest flaw of the sector. Other than earnings depending on dynamic pricing, workers must also bear their operational expenses such as fuel, vehicle, maintenance, and mobile data costs further reducing the take-home earnings. The workers are also vulnerable to arbitrary wage cuts or ID-blocking.
The growth of digital infrastructure has been at the core of growth for gig work, as it offers hundreds of employment opportunities because of the widespread use of smartphones. Though the gig economy has widened employment opportunities, at the same time, it has led to the casualization of labor, with the workers lacking job security, stable income, and social insurance. Though the gig economy is expanding rapidly, its benefits are with the platform companies, but workers face financial risks.
Qualitative research done by Ananya Radhakrishnan and Namrata Singha Roy sheds light on the economic insecurity in Bangalore ride-hailing gig workers. Of twenty drivers who were interviewed, 80% used gig work as their sole source of income, but 55% worked more than 16 hours a day to get by. The research discovered that 60% of workers were aged 26-35 years, and most of them could hardly manage to cover the cost of car repairs, fuel, and everyday living. The absence of social security, health insurance, and minimum wage protection has also contributed to economic uncertainty, compelling workers to work longer hours, during times of financial instability. Far from the flexibility gig work promised, gig work is extremely uncertain and economically unsustainable many times.
3. The Social Cost of Convenience- Perspectives
The opportunity for gig work comes with minimal entry barriers. Workers with little or no formal training or specific skill set can enter the sector as food and e-commerce delivery partners, or ride-hailing drivers; moderately skilled persons may land jobs as technicians, electricians, etc. These platforms enabled persons with disabilities and migrants to seek employment too. It requires little personal resources as well. Some food delivery partners rent electric bikes, completing deliveries without owning vehicles. Gig work generally comes with promises of autonomy and flexible hours, thereby allowing workers to choose when to labor and where to do it. But veiled under the promise of flexibility and independence, gig work harbors deep-seated challenges that profoundly shape workers’ lives.
- Health and Safety –
Extreme weather, long work hours, stress-inducing workplaces, and sometimes downright perilous situations characterize their work environment. The lockdowns during COVID-19 saw these delivery workers putting their health on the line to ensure essential services were met. Physically taxing gigs such as that of ride-hailing drivers and delivering personnel expose these workers to occupational diseases (like body aches, poor posture, fatigue, and prolonged headaches), and road accidents. Numerous reports also espouse details with appalling descriptions of violent attacks and assaults sustained by the workers at the hands of disgruntled customers while little was exerted by the corporation in their defence. - Career Progression and Alienation –
Unlike traditional jobs that provide workplace camaraderie, gig work is often isolating. Workers toil for long periods, perpetuating concerns of social isolation and poor mental health. A worker becomes caught in a vicious cycle of temporariness and unstable jobs, devoid of any growth prospects. - Discrimination and Social Inequalities –
Insofar as work provides low entry barriers, casting aside any prejudice of caste, class, or gender, the disreputability of workers, both from the customers as well as institutions, is the common experience of gig workers. They are treated as second-class citizens, often at the mercy of the arbitrary whims of demanding customers. Many gated societies prevent workers from using their entrances or elevators. - Ground reality of ‘Flexibility’ –
Many workers report working 14 to 16 hours a day just to earn a decent wage. The algorithm nature of work allocation forces workers to chase bonuses, often precluding them from taking a break. Some platforms also impose a mandatory login period. It is contradictory for an algorithm to impose long working hours while the companies woo the workers with the flexible work promise. - Algorithmic Exploitation –
Gig workers are, in a way, governed by the algorithm- their invisible supervisor. This impersonal cadre decides their compensation, routes, and timing. This mechanizes and commodifies the entire incentive plan to work longer. Base pay for any food delivery is reported to be as low as ₹25 per order, meaning workers are at the mercy of surge pricing and dubious completion bonuses designed by the companies.
4. Legal Aspects of Digital Age Delivery Activities
The legal framework for gig workers has been a superficially addressed topic since the rise of app-based platforms. It has been argued that gig workers are technically not employees since they have autonomy over their working hours; hence, recognizing them as independent contractors instead. The status of independent contractors deprives these gig workers of social security. The lack of a unified legal structure drives these gig workers further into the claws of exploitation, making a nationwide policy the need of the hour.
4.1 International Recognition and Legal Aspects
The United Kingdom and Spain recognized gig workers as employees with Spain passing a dedicated law for it – “Rider Law”. Such measures have significantly improved the condition of gig workers in these countries. The Proposition 22 law (2020), which was brought in response to The Assembly Bill (2019), has had questionable execution, placing the welfare of gig workers in California in question.
4.2 United Nation Stands
As the International Labor Organization continues to reiterate the importance of social protection for gig workers, states in India are making a step towards this initiative. Rajasthan’s Platform-Based Gig Workers (Registration and Welfare) Act, 2023 is a landmark legislation that mandates welfare contributions from platforms (Record of Law, 2023). The Karnataka Platform-Based Gig Workers Bill, 2024 is another step towards safeguarding the rights of the gig workers. The bill proposes the creation of a welfare board which in turn will implement and monitor various schemes.
4.3 Legal Classification of Gig Workers
A central debate in the gig economy is whether platform-based workers should be classified as employees or independent contractors. In India, platforms categorize gig workers as independent contractors, meaning they do not receive benefits like fixed wages, job security, or social security protections (Chaudhary, 2015). This classification is advantageous for companies as it limits their legal obligations, but it deprives workers of fundamental labor rights (Lawrbit, 2023).
The Code on Social Security, 2020 recognizes gig workers as a distinct category but does not grant them the same protections as formal employees. This lack of clarity raises concerns regarding unfair dismissals, wage exploitation, and the absence of benefits like health insurance and provident funds (Record of Law, 2023). The E-Shram initiative, brought in 2021 as a means to tackle the mounting stress of the unorganized sector was an overambitious endeavor providing the unorganized sector with social security while excluding the taxpaying group. Additionally, the burden of registration being on oneself, the lack of digital infrastructure, and the lack of awareness added to the underperformance of the initiative.
The Indian Federation of App-Based Transport Workers v. Union of India (2021) is an ongoing legal battle in the Supreme Court. The petition argues that gig workers should be entitled to benefits like public and employees’ provident funds (Unorganized Worker’s Social Security Act, 2008)
5. Way Forward: Recommendations
To focus on the vulnerabilities of gig workers, a multidimensional approach is required to balance worker protection and platform sustainability.
- Subsidized Warehousing for Gig-based Logistics
E-commerce and logistics companies face a problem which is paying a huge cost for warehouses. The Government can subsidize these Warehouses in return for a guaranteed normal paycheck or monthly basis salaries, This proposal can help companies maintain a healthy relationship between the company and gig- workers, which can make jobs more secure and with stable income. Sometimes companies do not provide a secure base income, which means that the Company’s employees lack financial security. In the majority of instances, there is no guarantee of secure income because firms are ready to reduce base wages instead of increasing them. Additionally, newly implemented regulatory policies are inclined to play a major role in the issue. Private regulation reforms, and taxation policy reforms, may tend to affect the way firms set remuneration, sometimes producing more base salary reductions instead of increases. These situations introduce an uncertain financial status to employees who require a secure income. - Microfinance and Loan Accessibility for Gig Workers:
Gig workers do not enjoy steady incomes, banks consider them risky borrowers. Thus, these workers find it difficult to secure loans. A microfinance system, as shown in the case of the PM SVANidhi Scheme for street vendors, could be structured to provide gig workers with very low-interest loans so that they can mitigate financial precarity. - Minimal Wage System and Social Security Fund
A dedicated governing body can be created to address problems specifically of gig workers, hence safeguarding their rights and assuring their economic security. A special budget would be provided to this department by the central government, which would consist of social security funds dedicated to gig workers. Apart from this, the ministry could also be financed from contributions obtained from employees, and government resources. The state would also have an important role in ensuring healthcare protection and accident insurance for gig workers. In hard times, imposing a minimum wage norm could be done to facilitate basic economic protection, hence the avoidance of overly relying on rewards for performance. This measure would ensure a better stable and sustainable working environment for gig workers at the same time while balancing the interests of enterprises and policymakers. - Preventing the Commodification of Gig Work
Platform companies need to reconsider their relationship with their human laborers. Most have embraced the commodification of their workers, who can be replaced at any point in time. Platforms have to shift from this exploitative business model into modifying their algorithms and platforms to embrace fairness and welfare for workers. It is essential to ensure transparency in jobs, equitable scheduling, and just wages to maintain dignity in work. If all these platform-centric businesses eliminate this model of efficiency and move towards ethical labor practices, they will tend to create a better, humane working environment. - Expansion of Code on Social Security 2020
The Code on Social Security 2020 does recognize the legal rights of platform-based gig workers including life and disability cover, retirement protection, paternity benefits, minimum wage, and accident insurance. The Code also provisions for the Social Security Fund, where platform aggregators are to contribute a small percentage of their annual turnover. However, this is not legally binding. Mandating this provision would make the gig worker less disposable to the employer platform. - Reclassification of Gig Workers to “Dependent Contractors”
The classification of gig workers is a hotly debated topic over remonstrances of companies from classifying them as “full employees”. However, worker protection is pertinent, especially when platform aggregators profit greatly from gig labor. Companies avoid employer obligation by classifying them as “independent contractors”. As a median, gig workers could be reclassified as “dependent contractors”. To give security to companies and the gig worker, a standardized and fixed period of probation can be put, after which the “independent contractor” can become a “dependent contractor” This would also improve the employer-employee relationship. - Transparent Algorithms
The impersonal and often unclear algorithm-based rewards, pricing and work allocation system currently dictates key aspects of gig workers’ earnings. As the algorithms are opaque, workers may be disproportionately affected by geography and work hours. Since workers are unaware of how these systems are decided, they find themselves at a disadvantage, severely hampering their bargaining rights. - Unionization of gig workers
Recognizing the union of gig workers is a crucial step for the welfare of gig workers. Providing them with the power of collective bargaining, a union allows gig workers to actively advocate for themselves and negotiate with corporations. Unionization can further lead to standardization by establishing wage benchmarks, fair practices and consistent policies. Making the gig workers conscious of their rights, strong union efforts could create industry-wide norms that balance flexibility with fair treatment, ultimately reducing exploitation and unpredictability in gig work.
6. Conclusion
Gig economy is a catch-all term that encompasses skill-specific freelancing and temporary work to platform-based jobs. While the gig economy, in general, faces challenges, the vulnerabilities of platform-based gig workers are the most pronounced. The scope of this study confines itself to platform-based gig work. The policy and legal frameworks to standardize the social protection of workers in the gig economy are still in their nascent stages both globally and in India. A few states in India like Rajasthan and Karnataka have started to formulate gig worker bills but none of the provisions are mandated or legally binding on the platform aggregators.
Many of these provisions remain on paper, as implementation is either inefficient or slow to come by. Future research could analyze the implementation and effectiveness of these pilot projects and how they can be adapted nation-wise. The increasing use of AI and algorithms necessitates further studies into the broader implications of evolving workplaces. As the platform-based gig workers work long hours, a comprehensive health study could be conducted to ensure work. Further studies could also include if these provisions are positively impacting employer-employee relationships.
7. References
- Singh, Ruchi, and Dr Vani Bhushan. Understanding the Fundamentals and Dynamics of the Gig Employment Landscape in India. July 2023.
- International Labour Organization. Expansion of the Gig and Platform Economy in India: Opportunities for Employer and Business Member Organizations. 2024.
- NITI Aayog. India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work. June 2022.
- Nair, Gayatri. The Political Economy of Gig Work in the Pandemic: Social Hierarchies and Labour Control of Indian Platform Workers. 2023.
- Radhakrishnan, A., & Singha Roy, N. Gig economy workers’ livelihood: A qualitative study of ride-hailing platforms in Bangalore City, India. Artha Vijnana, 65(2). Gokhale Institute of Politics and Economics.2023
- Bhattacharya, O. Ensuring employee status for gig workers: A critical analysis of the Rajasthan Act & way forward.2024
