General Studies Paper 3 (Indian Economy)
Question:- 10. What do you understand by Gig Economy? Discuss the various issues associated with it. Answer in 250 words
Jul 05, 2022


Gig Economy refers to a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. In a gig economy, large numbers of people work in part-time or temporary positions or as independent contractors. The result of a gig economy is cheaper, more efficient services, such as Zomato, Uber or Airbnb, for those willing to use them. A wide variety of positions fall into the category of a gig. The work can range from driving for Uber or delivering food to writing code or freelance articles. The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and the demand for flexible lifestyles.



The Code on Social Security, 2020 defines gig workers as those engaged in livelihoods outside traditional employer-employee relationship.

Gig Workers can be broadly classified into two categories — platform and non-platform-based workers.

(a) Platform workers are those whose work is based on online software apps or digital platforms.

(b) Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time.

The Gig workers can also be classified on the basis of skills. These are high-skilled, medium-skilled and low-skilled workers. According to the NITI Aayog Report, at present, about 47% of the gig work is in medium-skilled jobs, about 22% in high-skilled jobs, and about 31% in low-skilled jobs. Trends show that the concentration of workers in medium skills is gradually declining and that in low skills and high skills is increasing.



The gig economy offers a greater freedom of choice for the individual worker but there are many challenges associated with it:

  1. Lack of job security, irregular wages, and uncertain employment status. They can be terminated from their jobs without any notice. Many of them were laid off during the pandemic.
  2. No social security benefits like ESI, PF or insurance. They have no paid leaves and so failure to work means loss of wage
  3. Rising stress due to uncertainty associated with regularity in available work and income. Also, they are always under a pressure from algorithmic management practices and performance evaluation on the basis of ratings.
  4. Contractual relationship between the platform owner and gig worker denying the latter access to many workplace entitlements.
  5. Benefits are entirely based on one’s access to technology. People who don’t use technological services such as the Internet may be left behind by the benefits of the gig economy.
  6. Rural-urban bias: Cities which have the most highly developed services are most likely to avail the benefits.
  7. The gig economy trend can make it harder for full-time employees to develop in their careers since temporary employees are often cheaper to hire and more flexible in their availability. Also, the flexibility of working gigs can actually disrupt the work-life balance, sleep patterns, and activities of daily life.


CONCLUSION: Flexibility in a gig economy often means that workers have to make themselves available any time gigs come up, regardless of their other needs, and must always be on the hunt for the next gig. Recently, one of the platforms announced a pilot project to deliver food in just 10 minutes which will kick off in Gurugram. Moves like these increase the competitiveness but put the lives of their delivery partners in danger. According to NITI Aayog Report, India’s gig workforce currently stands at 77 lakh (2020-21). It is expected to rise to 2.35 crore by 2029-30. Hence, protection of rights and interests of gig workers needs to paced up. Gig Economy has the potential to create jobs for India’s large workforce, especially the low-skilled workers. The Government must take appropriate steps to support the expansion of gig economy and platforms. At the same time, the interests of the gig workers must be protected to provide them with just work conditions as well as social security benefits. Achieving the balance will need some effort from all stakeholders.