The rapidity at which the gig economy or platform economy or new economy services has spread across the world is a classic story of innovation in the demand-supply economics. Gig work encompasses contract based jobs for short term employment on a per task basis across emerging business models like digital marketplaces, asset/service sharing and service listing platforms. According to the recent reports, new economy jobs would contribute to 5% of service sector employment by 2030 and 1.25% of the GDP. It provides the worker flexibility in choosing the work hours and encourages women and student participation in the labour force. However, there are increasing grievances from the workforce which demand particular attention.
Per task format of work has led to gig economy workers being left out of social security benefits and other standard employee benefits provided by the employer. With falling incomes and increasing out-of-pocket expenses, the poor working conditions are aggravated, many having to work 12-16 hours a day in what was supposed to be a part-time job format. Inconsistent income and job pattern render the employment status of the workforce unclear. In fact, unlike traditional jobs, there is little scope for upskilling and/or career progression in the platform economy. Because such jobs are individualistic in nature, it becomes difficult for workers to form unions and achieve collective bargaining power to address their grievances. It is difficult to work out a compliance mechanism according to the labour codes for those jobs which are scattered across international jurisdictions. Gig economy has also revealed a wide gap between the rural and urban India in terms of access to such jobs. On the other hand, there is also a dearth in appropriate skills to fully take advantage of the potential of the gig economy emerging in the country.
Interestingly, Indian Federation of App-Based Transport Workers (IFAT) has filed a PIL with the Supreme Court seeking classification of gig economy workers as ‘unorganised workers’ under the Unorganised Workers Act, 2008 to avail benefits such as Provident Fund, health and maternity benefits, and pension protection. This would essentially transfer the responsibility of such benefits to the government from the service aggregator. A Fairwork India study on the state of the new economy in India ranks the performance of selected Indian Startups on parameters such as Fair Contracts, Fair Management, Fair Conditions, Fair and Fair Representation. Most of the startups fared poorly, their scores dropping to zero from previous years, especially on Fair Pay. Many a time, rising resentment among gig economy workers lead to protests citing unfair work conditions and pay constraints. Although the new Social Security Code recognises gig economy and platform economy workers, its implementation requires concrete and dedicated policy initiatives.
Some of the important aspects of the new economy that have to be resolved for its smoother expansion and functioning are – social protection for the workforce, work assurance, poor availability of cheaper logistics and transportation facilities, higher fee charging beyond the affordability of a major share of the population, high attrition rate among gig economy workforce, facilitating migrating workforce from smaller towns and cities, and investing in workforce upskilling and reskilling on a demand-oriented basis. It is pertinent for policymakers to address the concerns of different gig economy stakeholders given the penetration of internet services and the increasing contribution this sector is making to the political economy of the country.
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Views expressed by the author are personal and need not reflect or represent the views of Centre for Public Policy Research.
Sharon Susan Koshy is a Research Associate at Centre for Public Policy Research (CPPR). She completed her Masters in IR and Political Science from Central University of Kerala, and MPhil in Political Science from the University of Hyderabad. For her MPhil thesis, she explored the themes of state and feminist negotiations in post-Arab Spring Egypt. Sharon had also secured the UGC-Junior Research Fellowship during her research period in Hyderabad and Chennai. Her academic interests pertain to IR theory, gender politics, refugee studies, intersectionality, and area studies of South Asia, West Asia and North Africa, and Indo Pacific.