Editorial

Sustainability challenges of India’s gig economy

The rapid expansion of the app and online platform-based economy in India has also led to an exponential rise in several ‘gig and platform workers’ with the creation of new employment avenues

Sentinel Digital Desk

The rapid expansion of the app and online platform-based economy in India has also led to an exponential rise in several ‘gig and platform workers’ with the creation of new employment avenues outside the traditional employer-employee relationship. The announcement in the Union Budget that the government will provide them with identity cards, registration on the e-Shram portal, and healthcare security under PM Jan Arogya Yojana has brightened hope for social security measures for more than one crore gig workers in the country. The NITI Aayog has projected that the number of gig and platform workers in the country will increase to 2.35 crore in 2029-30. Addressing the challenges of long work hours and delivery target deadline pressure faced by gig workers is crucial for the sustainability of the platform economy. Legal guarantee of social security measures for gig workers has already been provided through the incorporation of the definition of ‘gig workers’ and ‘platform workers,’ and provisions related to the same have been provided in the Code on Social Security, 2020, enacted by the Parliament. The Code makes it mandatory to frame suitable social security measures for gig workers and platform workers on matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection, etc. Provision for a Social Security Fund contribution with contributions from aggregators in the platform economy is yet to be enforced. The Code mandates the aggregators to contribute 1 to 2% of the annual turnover of an aggregator subject to the limit of 5% of the amount paid or payable by an aggregator to such workers towards this fund. The aggregators are digital intermediaries or online marketplaces for buyers and sellers of goods and services such as food and restaurant aggregators, which connect customers with restaurants to place orders for delivery of food items by gig workers; rental car aggregators to facilitate travellers booking cabs and taxis; and car owners renting out their cars, etc. Customers’ satisfaction and ratings play a crucial role in aggregators making decisions on giving tasks to gig workers. The lack of transparency in the rating system places gig workers in a disadvantageous position. The cut-throat competition to get the largest share of the online platform market has led to some aggregators promising unrealistic delivery times and passing on the responsibility to achieve it to gig workers engaged by them. Lack of social security support makes the gig workers vulnerable to health and accident risk as they have no option but to achieve the delivery deadline even during inclement weather to get more tasks for increasing income. Most of the gig workers migrate to cities and other urban areas where the platform economy has flourished to meet the demand of the urban middle class because of their disposable income and flexibility brought by the spread of digital technology to get goods and services delivered to doorsteps simply by downloading an app on their smartphone and pressing the button. The saving of time spent in visiting a physical marketplace to buy goods, a restaurant to dine, and the comfort of a rental cab arriving within a few minutes has spiked the demand for delivery of goods and services by aggregators. The migrating workers require rental accommodation in the city for living, and to secure more tasks, they try to live in centrally located places where house rents are high. Besides food inflation, rising fuel prices also compel them to work for extra hours and at a faster pace to increase income to meet their expenses and save money for remittance to family members. The registration on the e-shram portal will bring them the benefits of 12 social welfare schemes of the central government. Currently, more than 30 crores of workers are registered on this portal, which is a national database of unorganised workers. The government taking the initiative and responsibility to provide social security cover for gig workers is laudable, but making the aggregators employing them contribute towards meeting part of the expenditure of the social welfare measures for them is equally important to reduce the burden on the public exchequer. The regulatory measures that will mandate the aggregators to ensure the safety and security of gig workers and protect them from exploitative work environments are long overdue. Protection measures cannot be the same as those available for registered unions of organised workers of manufacturing and other industries, but a legal mechanism needs to be put in place for a win-win situation for both aggregators and gig workers. There is no denying the fact that the profitability of the business ventures of aggregators is critical to creating more employment avenues for unemployed youth. Aggregators acknowledging the fact that better work ecosystems and social security for gig workers will only help increase their productivity and are essential for the expansion and long-term sustainability of their online and app-based business ventures will go a long way in supplementing the government initiatives made public through budget announcements.