In September 2021, the Indian Federation of App-based Transport Workers, on behalf of gig workers, had filed a public interest litigation in the Supreme Court. The petition demands social security benefits be provided to the workers from food delivery platforms such as Zomato and Swiggy and taxi aggregator apps such as Ola and Uber.
What is Gig Economy?
- A gig economy is a free market system in which organisations hire or contract workers for a short span of time.
- Simply put, the positions are temporary to meet the company’s requirements by having short-term engagements.
- Startups like Ola, Uber, Zomato, and Swiggy have established themselves as the main source of the gig economy in India.
Who is a Gig Worker?
- According to the Code on Social Security, 2020 (India), “A gig worker is a person who performs work or participates in work arrangements and earns from such activities, outside of the traditional employer-employee relationship.”
- They are independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.
Size of Gig Economy in India –
- A NITI Aayog study on “India’s Booming Gig and Platform Economy” has estimated that at present, about 47 per cent of the gig work is in medium-skilled jobs, about 22 per cent in high skilled, and about 31 per cent in low-skilled jobs.
- These figures clearly indicate the importance of the gig working community in the Indian economy.
- Research studies by Boston Consulting Group (BCG) have indicated that participation in the gig economy is higher in developing countries (5-12 percent) versus developed economies(1-4 percent). Most of these jobs are in lower-income job-types such as deliveries, ridesharing, microtasks, care and wellness.
- These studies further estimate that in 2020-21, 77 lakh workers were engaged in the gig economy.
- The gig workforce is expected to expand to 2.35 crore workers by 2029-30.
Average Age/Income of Gig Workers in India –
- The median age of Indian gig workers is 27 and their average monthly income is Rs 18,000.
- Of these, about 71 per cent are the sole breadwinners of their families. Additionally, gig workers operate with an average household size of 4.4.
Challenges faced by Gig Workers –
- While platform companies have created avenues of employment, it has often been marred by low wages, unequal gender participation, and a lack of possibility for upward mobility within an organisation.
- This has triggered protests from workers at companies like Swiggy, Zomato, Ola, Uber, and Urban Company, among others.
- Gig workers are typically hired by companies on a contractual basis and are not considered their employees.
- As a result, they do not receive some of the benefits that an on-roll employee of the company may have. This means they often do not receive benefits like paid sick and casual leaves, travel and housing allowances, and provident fund savings, among other things.
What should be done?
- Fiscal Incentives –
- Fiscal incentives such as tax-breaks or startup grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion of their workers.
- This was highlighted by NITI Aayog in its report “India’s Booming Gig and Platform Economy”.
- Retirement Benefits –
- The report also recommended firms adopt policies that offer old age or retirement plans and benefits, and other insurance cover for contingencies such as the Covid-19 Pandemic.
- Such plans and policies may be envisaged under the Code on Social Security, 2020.
- Businesses should consider providing income support to workers.
- It would be a critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work.
- It also suggested offering paid sick leave to workers apart from insurance cover.