India and its Large Gig Economy

By Frank-Jürgen Richter

July 16, 2021

Gig work was a growing trend since internet accessibility became commonplace. Gig workers do not have the steady work hours or remuneration like workers in traditional job roles. While a large share of this segment includes individuals, who are gig workers by choice, there are also numerous others who became gig workers purely by chance.

In India’s case, for example, there are nearly 500 million workers. Its biggest employer is agriculture with an estimated 200 million workers engaged in this sector. Of the rest, many were furloughed in the pandemic’s wake and have found new employment in the growing informal economy. In developed economies, these ‘gig workers’ have obtained legal rights and higher pay. Is this possible in the Indian gig sector? What will that imply? Are there any sectors in India without a gig aspect? 

Horasis is organizing the Horasis India Meeting on 24 July 2021 to deliberate on such topics. The one-day virtual event will see participation from a diverse range of people, spanning members of governments, businesses, academia, and the media. The goal is to collectively devise actionable and sustainable solutions for pressing problems.

Gig Work Categories

Gig work is not a new phenomenon but has grown due to the pandemic. It has been around for considerable time although official record keeping for this category only began over the past decade or so. A 2016 McKinsey report highlighted that an estimated 162 million people in the US and Europe were engaged in some form of gig work. These were substantial shares of either region’s working age populations.

The report also said that gig workers could broadly be categorized under four key heads: free agents, reluctants, casual earners, and the financially strapped. In India’s context, a large share of its gig economy comprises workers who fall under the fourth category; they are financially challenged.

Can India’s Gig Workers Obtain Legal Rights?

Gig work acquired momentum with the introduction of aggregator platforms. The likes of ride hailing services such as Uber and India’s home-grown Ola, were a welcome opportunity for thousands of drivers/operators. They were able to choose their preferred work hours, execute more daily trips—and in the event they chose not to work—they had the flexibility to not ‘sign-in’. While it initially seemed a win-win proposition, the perils of gig work came to the fore with the pandemic’s onset.

With travel restrictions that continue to affect many regions, these gig workers became vulnerable. Not only did their revenue source come to an almost standstill, they had little by way of social security. Many in traditional job roles facing such precarious conditions had fallback options such as provident fund savings. But in case of an Uber or Ola operator, they were left to fend for themselves.

Are There Any Sectors in India Without a Gig Impact?

India is home to a large informal economy. The current administration aspires to turn India into a $5 trillion economy by 2024. A key part of the agenda towards fulfilling this target was formalizing the informal economy. Meanwhile, the International Labor Organization observed that “informality was found in both the traditional informal economy and–increasingly–through the growth of informality in the formal sector.” The report also added that, “Limited employment creation in the formal economy means that for many people the only alternative is to seek employment in the informal economy.”

With even the formal sector exploring informal routes, almost every sector in India has a gig impact. While technology platforms were able to ensure steady earnings for a large share of gig workers, the ongoing economic downturn has turned the tide against them. With platforms reducing workers’ earnings and increasing the daily distances to be covered to earn bonuses, gig workers contracted with such companies are protesting by ‘logging-out’ of the platforms.

Collaborating for Solutions

Even in the developed world, ride hailing or delivery operators have only recently begun enjoying social security benefits. In fact, in some cases, legislations are still not in effect countrywide; they are only limited to specific states or regions. Identical strategies cannot be implemented in India since the dynamics and variables involved are vastly different. However, preemptive measures can be explored since formulating and implementing such policies take considerable time.

In this regard, policymakers and industry stalwarts can come together and deliberate on possible actions that can safeguard this sizeable gig worker demographic. Social security frameworks can be deliberated upon to ensure gig workers do not fall through the cracks. In a pre-pandemic setting, many gig workers had made steady strides in bettering their socio-economic positions. Unfortunately, the pandemic has eroded a large share, if not all of the gains made. It is time to put the focus back on the gig economy in India.

A food delivery boy looks at the app for his next destination in Mumbai, India.