SpecialArticle 1

The Coming of Age ofIndia’s Gig Economy

By Rajesh Williams

India has witnessed dramatic growth in the gig economy in thelast few years. The country has seen the emergence of successful
gig work platforms – all pointing to the tremendous opportunity thatthe gig economy represents. The transaction value of the volume ofwork carried out by gig workers in India could be worth around $250
billion. Construction, manufacturing, retail, and transportation andlogistics account for more than 70 million of the expected
on-demand jobs in India.
A little over 3 million individuals make up India’s thriving gig
economy. The growing smartphone and Internet penetration andemergence of platforms for delivering services have given a big fillip
to the gig economy in the country, much to the convenience of theIndian urban consumer: scheduling a ride to work, hiring aprofessional cleaner or ordering a meal is only a few clicks away.
According to a report by the Boston Consulting Group and Michael& Susan Dell Foundation, India’s gig economy, which has gained
momentum with the growth of startups and Internet companies such
as Zomato, Swiggy, Ola, Uber, Urban Company, Flipkart, Amazon,and Dunzo, has the potential to service up to 90 million jobs inIndia’s non-farm economy alone, transact over $250 billion involume of work, and contribute an incremental 1.25%(approximately) to India's GDP over the “long term”. The four largest
industry sectors – construction, manufacturing, retail, andtransportation and logistics – could alone account for over 70 millionof the potentially “gigable” jobs.
For the millions of young adults finishing school and college eachyear, the gig economy provides a jumping-off point for their careers.
The gig economy is also a viable option for women to re-enter theworkforce in large and meaningful ways. With 85% of India’s
workforce employed through the informal sector, the use oftechnology platforms lends a degree of formality and drives greatertransparency of labor demand and supply.
Talking about the coming of age of India’s gig economy during thepandemic, Nirmit Parikh, founder & CEO at Apna mobile app, says,“Covid-19 has transformed the work, workforce, workplace, andwork culture and established a next normal. The future of the next
normal is definitely dominated by the gig economy. In the last one
year, with the rise of work-from-home jobs, gig work is becoming
very normal for organizations and even frontline workers are gettingused to splitting time across different jobs to make ends meet.
Today, the gig economy is a free and global market, wherecompanies and contractors set short-term and on-demand
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Author Rajesh Williams

professional relationships for skill-based tasks. The AssociatedChambers of Commerce & Industry of India (ASSOCHAM) stats
convey a positive projection for the gig economy increasing to $455
billion by 2024 at a 17% CAGR. The government has realized theimpact of gig workers in the Union Budget 2021 and will thereby
create provisions for them towards social security among others.”
In the past decade alone, the advent of the now ubiquitousridesharing apps and delivery platforms have brought terms such as“flexible work”, “gig work”, and “sharing economy” into themainstream. Employers (both large and small) are also recognizing
the value of these platforms to improve efficiency and increasedemand for their services. Transport, logistics, and home-based
services have seen rapid growth. We see significant potential forfurther adoption in labor-intensive sectors like construction,manufacturing, and functional roles.

Gig Economy: an Old Concept in India
Gig work is not a new concept in India. It has always existed invarious forms in the country’s informal economy. The urban andrural areas of India have always had the equivalent of gig work –from temporary farm workers and daily-wage construction laborers
to household help. A sizeable part of the gig economy still operates
through word-of-mouth and personal networks. Today’s gig
economy can be regarded as an evolution in the way work andworkers are sought out, contracted, and compensated. Technology
has brought many services to our mobile devices, and gig platforms
have been quite successful in meeting existing and new consumer
demand.
These gig platforms have created many jobs in the areas where
they operate, but there is a great need for formalizing and organizingIndia’s gig economy. A comprehensive plan for unlocking the fullpotential of this economy is still missing.

India’s Gig Economy – Most Visible Spacesof Activity
In industry sectors, a sizeable number of responsibilities and jobroles has traditionally been task-based and fulfilled by temporarylabor. Specifically, the construction industry operates largely with
on-demand informal labor which is typically provided through a
network of labor contractors and other third-party connections.
https://www.jef.or.jp/journal/

TABLE

Most visible spaces of activity & keyplayersMost Visible Spaces of Activity

Key Players

Personal transport

Uber and Ola

Last-mile delivery

Swiggy, Zomato, Delhivery, Dunzo,and Foodpanda

At-home personal services

Urban Company, Housejoy, Handy,and Mr. Right

At-home nursing

PorteaHigh-skilled and professional tasks

FlexingIt and Upwork

Source: Compiled by the author

There is frequent use of on-demand workers for personal services
such as drivers, appliance repair and maintenance, renovation, andminor construction work in Indian households as well.
Recent reports and studies indicate that half of all Indian gigworkers are in industries such as software and technology. They
identify strategy, technology, and marketing as the top three skills indemand for around 50% of projects with startups, large corporates,and professional services.
What are the most visible spaces of activity in India’s gig
economy? They have been in personal transport, last-mile delivery,
and at-home personal services. The Table above gives the mostvisible spaces of activity in India’s gig economy and key players inthem.

Gig Workers in India
According to a report by the Boston Consulting Group and Michael& Susan Dell Foundation, “gig workers are not a homogenous group,
but fall into one of eight distinct segments, depending on their skill
level, life stage, and contribution to household income.”
The segments are:
1. Purpose Fulfillers: hair and beauty professional, cook, and tutor.
Jobs are chosen on the basis of flexible hours, nearby location,and safe work environment.
2. Aspiring Entrepreneurs: mechanic, technician, carpenter, andelectrician. They seek job regularity or continuity and learning
opportunities to master skill sets.
3. Ambitious Hustlers: data entry operator, telecaller, and Life
Insurance Corporation agent. Determined to make a career intheir current field of work, they aspire to growth in terms oflearning and rising in designation.
4. Hopeful Balancers: cab driver and auto driver. They want to earn
good pay and look for salary growth potential and nonmonetary benefits like medical, life or vehicle insurance.
5. Financial Contributors: domestic help and healthcare worker.
They want to earn a good salary and save some money.
6. Financially Strapped Solo Earners: construction worker andfood delivery agent. Their level of skill is low, and they want agood salary and regularity or continuity of job.
7. Earn to Burn: telecaller and data entry operator. Students fallinto this segment. They want to earn a salary for discretionary
spending.
8. Millennial Providers: food delivery agent, package delivery
agent, and data entry operator. Students fall into this segment
as well. They want to support their family and fund their own
education; they look for jobs that pay well.

Coronavirus-Induced Lockdown
The coronavirus-induced lockdown in 2020 hit gig economy
workers – especially in the ride-hailing, delivery, and cleaning
segments – the hardest. According to a study by Flourish Ventures,around 81% of them faced sharp declines in their incomes. Nine outof 10 gig workers were earning less than 15,000 rupees per monthcompared to one in 10 before the lockdown. Drivers of taxi
aggregators were also severely hit by the lockdown, reporting up to90% reductions in incomes. Workers of food-delivery companies
reported a 75% decline and cleaning staff witnessed up to a 72% fall.
Also, women gig-economy workers suffered a bigger decline inincomes than their male counterparts. Around 74% of women
workers made less than 10,000 rupees compared to 65% of men.
The second wave of the Covid-19 pandemic in India, which started
in the middle of March 2021, also had a huge impact on
consumption and consequently on business. However, much to therelief of the people participating in the gig economy, India soon
emerged stronger from the pandemic and started witnessing a rise inits gig economy. Today India is seeing an explosion of app-based
service providers.
Varun Khaitan, co-founder of Urban Company, which is Asia’s
largest online home-service platform, says, “We are going to domore business than we did before the second wave. Pre-Covid
consumption has fully come back and has doubled post-wave and isback to an all-time high. Over a few months from now, it will growJapan SPOTLIGHT • November / December 2021

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more. Consumption is fully back. A lot of that is a function of ourplatform because we provide services at home. People consider itsafer than stepping out of their home. Incidentally, more than 92% of
our service partners have been vaccinated.
“Folks on our platform make one-and-a-half times or two times
more money than they make elsewhere in the country. From preCovid days to post-Covid days, the interest to join Urban Company
has grown much more than before, because the offline service
sector has taken quite a beating. Many salons and repair shops haveshut down, and individuals who used to work there have now, withurgency, moved to our platform. They are quite happy, and I don’tthink they will ever go back. You see, the entire economy is growing
by leaps and bounds – thanks to platforms like Urban Company.”

Dissatisfaction Among Gig Workers
The rising gig economy in India, however, fails to conceal thewidespread dissatisfaction among the majority of gig workers. Aswork assurance is the most important job driver for gig workers, lackof job stability turns out to be the biggest source of dissatisfaction
for most of them. Timely payment is another potent job driver forthem. Many workers take up gig work to meet expenses like loan
instalments and medical emergencies. Timely payments are,therefore, critical for them. Another key dissatisfier is lack ofsufficient learning opportunities. A young data entry executive says,“I am earning decent money which helps me pay my education fees,
party on weekends, and buy trendy clothes. However, I am notlearning anything here, doing the same mundane task every day. I
want to learn analytics and create dashboards. Such jobs are in
demand now and I can build my career on it but here I do not get
such opportunities.”
A majority of workers view gig work as a long-term opportunity
and want regular increments. They regard regular increments astheir top job driver at work. An Uber driver in Mumbai says, “I
started driving for Uber in 2015; I used to earn in excess of 40,000
rupees a month as compared to 25,000 now. The platform should
include a 10-15% surge fee based on my past performance andloyalty; instead, my earnings have reduced. With rising inflation, I
cannot continue to support my family by continuing to work here.”Social Security CodeAlthough on-demand work has benefits such as convenience,
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flexibility, higher unit pay, and greater efficiencies, it has also givenrise to questions regarding minimum wage requirements, worker
protection, and consumer rights.
According to Amitava Ghosh in his Gig Economy in India Rising(Bilaspur, Evincepub Publishing, 2020), “Advertisers cunningly
exploit gig workers amidst a scarcity of formal jobs by lowering theexchange price of services for the efforts put in by the gig workers.
In the absence of any regulatory bodies to set a guaranteed earning
on any gig job, it ultimately leads gig workers to remain at the beckand call of the advertiser... Gig workers are not covered under any
Social Security Law of the land, as it is an unorganized sector; while
the labour and employment laws cover only workers in organizedsectors. They are deprived of certain mandatory social security
benefits enjoyed by the formal employment workers like insurance
and employee compensation, maternity benefit, medical benefit,
disablement benefit, dependent benefit, provident fund, pensionary
benefits, statutory bonus, gratuity, etc. Therefore, the future of gig
workers is not protected like the workers in the organized sectors.”“Currently, these workers are not covered under health,
Employees’ State Insurance, the Provident Fund (PF) or any otherscheme as the gig economy is not yet defined as a way of life,” says
Neeti Sharma, senior vice-president of TeamLease Services, astaffing company that provides human resource services to variousindustries. “Regulation will ensure fairness as well as accountability.
When it is formalized, the gig economy will draw more
professionals,”
The legal framework in India does not equate gig or platformworkers with regular employees. The definition of a gig worker still
remains unclear. Existing Indian jurisprudence refers to gig workers
as independent contractors; and under the Code of Social Security
Bill 2020, the term “gig worker” has broadly been defined as “aperson who performs work or participates in a work arrangement
and earns from such activities outside of traditional employeremployee relationships”. The code defines “platform work” as “anemployment form in which organizations or individuals use an online
platform to access other organizations or individuals to solve specificproblems or to provide specific services in exchange for payment”.
The code also points out that such workers may be provided withcertain social security benefits as determined by the central
government. These may include life and disability cover, accident
insurance, health and maternity benefits, old age protection, crèche
and childcare services, and a few other benefits.
Commenting on the Code of Social Security Bill 2020, Ghoshwrites: “While on the subject of the Code of Social Security Bill 2020,
till the time it is converted to a full-fledged Act to guide and govern
the social security aspects of the gig workers, the persons in the gig
economy in India will suffer.”

Budget for 2021-2022 – a Shot in the Armfor Gig Workers
Gig workers got a shot in the arm when the government decided
to extend social security benefits. While presenting the budget for2021-2022, Finance Minister Nirmala Sitharaman said, “For the firsttime globally, social security benefits will extend to gig and platformworkers.” According to Sitharaman, the benefits proposed in thebudget would include minimum wages and health cover under theEmployees State Insurance Corporation.
“We are proposing to set up a portal to collect relevant information
on gig workers along with building, construction workers and othersuch workers. The portal will help formulate health, housing, skill,insurance, credit, and food schemes for migrant workers... We willconclude a process that began 20 years ago, with theimplementation of the four labor codes. Minimum wages will beapplied to all categories of workers. They will all be covered by theEmployees State Insurance Corporation,” she said. It is felt that thenew measures will streamline the gig economy, transforming it into a
more organized sector, which should help attract more talent in the
coming months.

Flip Side of Regulatory Framework
What would be the impact of the regulatory framework on
platform-based companies? Answering this question, Anandorup
Ghose, a partner at Deloitte India, said, “The bigger issue is that themore regulation you bring into the segment, the more the employers
will have to pay for hiring gig workers. It’s a fine balance right now.
The increase in cost will make some parts of the gig economy lessattractive from the employment perspective. Let’s say, you bring ininsurance benefits similar to the ones given to normal employees. As
soon as you do that, the cost benefit will come down marginally.
Now, if you give PF benefits to gig workers like the way you givethem to normal employees, your cost-benefit will come down further.
Regulation is important because fundamentally the biggest challengein India has been to ensure that a person gets paid for the task thatthe person performs. The payment cycles can be just anything in aformal sector as well... payment cycles could be very unsustainable.
For it to happen in a structured manner, regulation is important... but
regulation as long as it does not increase the cost of ownership ormanaging gig workers for companies.”
Sharing his thoughts on the impact that the regulatory framework
can have on platform-based companies, Khaitan said that “It’s apositive thing: India will be one of the very few countries to actuallylegitimize gig in a very formal way and that will itself give a huge
boost to the gig economy – from being sort of a semi-formal part ofthe economy to actually being a formal recognized part of theeconomy. It will increase trust on the side of consumers and we will
get to see a lot more worker participation. It will also make platforms
more responsible in areas where they are not.”Conclusion
The gig economy in India, which has immense potential for India’s
economy and workers, has been rising by leaps and bounds. Moreand more people are depending on gig work for their primary
income. India’s gig economy can serve up to 90 million jobs and add
1.25% to India’s GDP. However, the rise in the gig economy has notbeen able to conceal the widespread dissatisfaction among themajority of gig workers. There has been growing concern about
whether employee benefits and retirement and pension facilities
should be extended to gig workers. Much to the benefit of gigworkers, the government of India recently proposed to launch a
portal to collect relevant information about gig workers to formulatesocial security schemes for them and migrant workers. However,many gig-economy players feel that regulation would end up forcing
employers to pay more for hiring gig workers. A rise in costs would
make some parts of the gig economy less attractive andconsequently decrease employment. In addition, gig in today’s India
is largely limited to one kind of workforce. The country is not really
going up the value chain in terms of looking at gig for middle orsenior management. The government must see to it that gig expands
to the white-collar management level.

Rajesh Williams is a professional editor and a writer with a background in
instructional design, technical writing, technical editing, and teaching.

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