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The announcement by Congress on Monday that its government in Telangana is all set to introduce a legislation to protect the 4.2 lakh gig workers in the state has brought the spotlight on the trials and tribulations of the gig workforce across the country.

 

Mandatory registration of gig workers by aggregators, constitution of a tripartite board comprising workers, aggregators, and the government to monitor gig worker welfare and setting up a welfare fund for gig workers are among the highlights of the proposed legislation. The announcement was made by Congress general secretary in-charge of communications Jairam Ramesh in a post on X. He also shared a draft of the bill on the microblogging platform.

 

Who is a gig worker?

 

One of the key by-products of the globalised economy has been the emergence of a set of contract or freelance workers called gig workers. They work on a temporary, flexible basis, often for multiple clients or companies. They are typically independent contractors rather than traditional permanent employees.

 

A free market system in which temporary positions are common, organisations enter into contract with independent workers for short-term engagements. On the face of it, it appears like a win-win arrangement for both the parties but there are several challenges facing the gig economy.

 

Job insecurity, low and unstable income, limited social security benefits, and a lack of legal protection are among the major concerns of gig workers who work simultaneously with various industries, providing services ranging from creative work and technical tasks to manual labour and service-oriented roles.

 

Companies like Uber, Ola, Swiggy and Zomato run their entire businesses by hiring gig workers. Gig economy workers first started being recognised as workers in the legal system by the United States.

 

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The existing labour laws in India are not adequate to address the problems of gig workers. A holistic approach is needed to tackle the emerging challenges and ensure a more equitable gig economy in the country.

 

India, hub of gig economy

 

The market has grown tremendously with the rise of the internet, particularly in developing countries like India which now has the fifth largest population of gig economy workers in the world. By 2030, it is expected to move to the third position.

 

Currently, an estimated 7.7 million people are engaged in gig work, including over 5 million in retail trade, sales and e-commerce sites.

 

A survey conducted last year revealed that over 43 per cent of gig workers earn less than Rs 500 a day or Rs 15,000 a month after deducting all costs. And, 34 per cent of app-based delivery persons earn less than Rs 10,000 a month. These income disparities contribute to existing social inequalities.

 

Over 80 per cent of app-based cab drivers were unsatisfied with the fares offered by the companies, while over 73 per cent of app-based delivery persons were dissatisfied with their rates. The survey also revealed that employers were deducting between 31-40 per cent of commission rate per ride of drivers, while the officially claimed figure by the companies themselves is 20 per cent.

 

The new regulatory mechanism for the gig economy must ensure that these companies establish fair and transparent payment structures to protect gig workers from being underpaid or exploited. Payment of a minimum wage to platform workers will help guarantee a fixed component in the income.

 

The Covid-19 pandemic highlighted the gig economy’s resilience and adaptability. Many workers turned to gig platforms for income during the period of economic uncertainties, and remote work became more commonplace.

 

Pros and cons

 

Gig economy, an inevitable evolutionary necessity, has both advantages and disadvantages. While creating new opportunities, it has also thrown up new challenges of the unchartered territory. One of the major benefits for the gig workers is that they will have greater freedom of choice and can juggle two to three different jobs. And, the companies will not have complete control over them.

 

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The disadvantages, though, are that gig economy workers usually have higher work hours than regular workers. Moreover, there will be no benefits like health insurance, paid leaves, or job security.

 

The government must change the legal framework for these workers to protect them and ensure that they, too, receive better conditions just like full-time workers.

 

Social security non-negotiable

 

Driven solely by market demand, the gig sector typically results in a lack of job security and uncertainty attached to the continuity of income.

 

It is here that the social security net becomes absolutely important. Lack of access to employer-sponsored health insurance and other healthcare benefits leaves gig workers vulnerable to unexpected medical expenses. Prioritising their health and well-being will create a healthier and more productive workforce.

 

Exemption from traditional employment protections creates disparities where gig workers face exploitative working conditions and inadequate compensation. Providing social security benefits will provide a level playing field.

 

Without employer-sponsored retirement plans, gig workers may struggle to save enough for their future. Enabling gig workers to save for retirement will reduce the risk of future financial hardship and dependence on public assistance programs.

 

However, the blurred boundaries between self-employment and dependent employment, and freedom to work for multiple firms or quit at will make it difficult to formulate social security benefits schemes for this workforce. The gig economy is characterised by its flexibility, allowing workers to choose when, where, and how much they work. Designing social security benefits that accommodate this flexibility and meet the diverse needs of gig workers is a complex task.

 

Way forward

 

There is a need for reforming labour laws to recognise and protect the rights of gig workers, expanding access to social security benefits, including healthcare, pensions, and unemployment benefits, providing training and upskilling programmes to help gig workers improve their skills and career prospects.

 

Though the Code on Social Security, 2020, contains provisions for gig workers, the rules are yet to be framed by the States. India can also consider the international experiences in this regard and adopt those models to suit the requirements of the domestic gig economy.

 

For instance, the United Kingdom has instituted a model by categorising gig workers as “workers,” which is a category between employees and the self-employed. This will ensure them a minimum wage, paid holidays, retirement benefit plans, and health insurance. The practice of classifying gig workers as self-employed or independent contractors needs to be eliminated.

 

A constructive collaboration is needed between governments, gig platforms, and labour organisations to establish fair and transparent mechanisms for sharing the responsibility of providing social security benefits.