Future of Asia’s Gig Economy

By Frank-Jürgen Richter

July 1, 2024

The gig economy, characterized by freelance and contract-based work, is rapidly expanding across Asia. This shift is driven by digital platforms facilitating services ranging from ride-hailing and food delivery to freelance graphic design and consulting.

Asia’s gig economy is booming, fueled by technological advancements, urbanization and a growing appetite for flexible work arrangements. Owning a smartphone and having mobile internet has become ubiquitous with urban living. There is a mass migration of young minds from rural areas to urban hotspots. This trend is common among most Asian countries.

Countries like India, China, and Indonesia are experiencing substantial growth in gig-based employment. In India, the gig economy has expanded significantly, with nearly 15 million gig workers engaged in roles such as delivery, cleaning, consulting, and blogging. India has emerged as a major player in the global gig economy, supplying 40% of the world’s freelance labor. It has surpassed the United States, China, Brazil, and Japan to become the fifth-largest gig economy globally. By 2030, India’s gig workforce is projected to grow to 23.5 million, accounting for about 4.1% of the total workforce.

In China, over 200 million people are engaged in gig work across various industries, including ride-sharing, food delivery, e-commerce, and online tutoring. Prominent platforms like Didi Chuxing, Meituan Dianping, and Alibaba’s Taobao have been instrumental in facilitating these gig work arrangements.

Challenges for Gig Workers

The shift towards gig work is not only reshaping the labor market but also the way individuals perceive employment, with some valuing flexibility and autonomy over the security of a 9-to-5 job. While this trend offers unprecedented flexibility and opportunities, it also presents significant challenges to traditional social safety nets.

Gig workers typically lack access to traditional employee benefits such as health insurance, retirement plans and paid leave. This absence of a safety net leaves them vulnerable to financial instability. 

China’s gig economy is increasingly attracting women, who now make up over 20% of the workforce. However, in this predominantly male industry, women face significant challenges, including discrimination, unequal pay and male-centric algorithmic labor controls.

Similarly, a recent report highlights the plight of India’s gig workers, such as cab drivers and delivery persons. Over 70% of those surveyed struggle to manage household expenses due to substandard net monthly earnings. These low earnings stem from unfair fare structures, high commission rates, and arbitrary deductions by aggregator companies. Additionally, overworked gig workers in India report spending less time with their families and experience both physical and mental health issues.

Regulatory and Industry Responses 

India recently enacted the Code on Social Security 2020, introducing protections for gig economy workers. These include minimum wage requirements, social security benefits, and accident compensation. Additionally, the code advocates for the establishment of the National Social Security Board to develop appropriate schemes for gig workers.

Similarly, elsewhere in the region, the Chinese government implemented new regulations for delivery and ride-hailing platform companies. These regulations mandate that all gig workers, including drivers, food delivery workers, and couriers, receive wages no lower than the local minimum wage and be insured by their employers. Specific guidelines were also introduced to safeguard the rights of gig drivers in the ride-hailing sector, ensuring fair pay and sufficient rest time.

Industry leaders in India are increasingly focusing on initiatives to enhance the well-being and empowerment of their gig workforce. Major platforms such as Zomato, Swiggy, DriveU, and Urban Company are at the forefront of this movement, each implementing unique measures tailored to support their gig workers in various ways.

Zomato, a prominent player in the food delivery sector, has pioneered a significant initiative to combat worker fatigue by introducing shelter rest points. These designated areas provide delivery personnel with a comfortable space to rest and relax between deliveries. Swiggy, another major contender in the food delivery domain, has taken a different yet equally impactful route by launching skilling programs. These programs are designed to empower gig workers by enhancing their professional skills, thereby broadening their career opportunities. DriveU, which provides on-demand driver services, is focusing on the safety and security of its drivers. The company has introduced comprehensive insurance coverage for its drivers, ensuring that they are protected against unforeseen circumstances. Urban Company, a platform offering a wide range of home services, is adopting a particularly innovative approach by introducing an employee stock ownership plan for its partners. This initiative aligns the interests of gig workers with the success of the platform, giving them a sense of ownership and a potential financial stake in the company’s growth.

In Greece, recent regulations have successfully improved working conditions for platform workers without compromising the benefits of self-employment. These rules require digital platforms to meet the same welfare, health, and safety standards as traditional employers. Moreover, Greece has set clear guidelines for determining whether a platform worker is considered self-employed. This legal clarity empowers platform workers to accurately assess their employment status. 

Greece along with Estonia also came through “in the spirit of compromise” to support EU’s platform work directive recently. Some as Nicolas Schmit, EU’s Employment and Social Affairs Commissioner consider it “a momentous day for gig workers”, as the directive aims to regulate and provide employment rights to several million gig workers in the EU.

The Horasis India Meeting 2024 will delve into crucial topics that will dictate the future of India. In its 16th edition, the two-day event will celebrate India and Greece’s long bilateral journey. The meeting will also bring together business leaders from India and Greece to brainstorm new pathways to better futures for both the countries.

The rapid growth of the gig economy in Asia presents both opportunities and challenges. Regulators must navigate this evolving landscape with policies that ensure gig workers enjoy the benefits of flexibility without sacrificing security. By revising legal frameworks, implementing social security schemes, and ensuring platform accountability, governments can create a supportive environment that allows the gig economy to thrive sustainably. As the nature of work continues to evolve, protecting the rights and welfare of gig workers will be crucial in building a fair and resilient future of work in Asia.

Photo Caption: A gig worker charging his electric bike on the streets of New Delhi.