Is ‘Digihenheimer’ an opportunity or vulnerability for gig workers in cities?

Despite employment diversity, gig workers face challenges such as lack of income safety nets, institutional regulatory mechanisms and skill training.

The advent of technology and concomitant digitalisation has unleashed new business models and working arrangements in urban centres. The gig and platform economy are at the heart of this structural transformation of jobs, disrupting sectors like ride-hailing transport services, profession, education, home services and retail. I refer to this as ‘Digihenheimer’- a counter phenomenon to regular paid jobs.

Definition of Gig Workers

In the Niti Aayog (2022) report, gig workers are defined as those engaged in livelihoods outside the traditional employer-employee arrangement. They can be broadly classified into platform and non-platform-based workers. Platform workers are individuals whose work is based on online software apps or digital platforms.

While non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full time. Gig jobs are flexible, on a temporary basis, and mostly create digital networks.

An official estimate of 200,000 gig-workers, in Dunzo, Swiggy, Zomato, Blinkit, are employed in Bengaluru alone and this number is increasing each day.

Globally, a new digital revolution has been ushered in by the burgeoning gig workforce. India, with its demographic dividend of half-a-billion labour force, is no exception. It has 66 % of the world’s youngest population (more than 808 million) with rapid urbanisation prospects. There were 750 million smartphone users out of 1.2 billion mobile scribers in 2021 (Jayaram 2022). This makes India the new frontier of technological revolution (Aayog 2022).

By 2020, an estimated 8 million gig economy jobs will be present in India, which could increase by 90 million in the non-farm sector (by 10 years) with $250 billion transactions at 1.25 percent of India’s GDP (BCG and Michael & Susan Dell Foundation, 2021 in Aayog 2022). They constituted 2.6% of the non-agricultural workforce or 1.5% of the total workforce in India (Aayog 2022).

According to the report by NITI Aayog, the gig workforce in India is 7.7 million and is expected to expand to 2.35 crore (23.5 million) workers by 2029-30. In another estimate, India is likely to have 350 million gig jobs (23%) by 2025, presenting a huge opportunity for job seekers to capitalise and adapt to the changing work dynamics. The report by ASSOCHAM reveals that the size of the gig economy is estimated to grow at a CAGR of 17%, and will hit a volume of $455 billion by 2023.

A delivery personnel
A delivery person. Pic: Mahesh V

Read more: Panel discusses legal protections for gig economy workers

What draws them to gig work?

Some of the key drivers for the emergence of the gig economy in India include: economic liberalisation-digital revolution, rise of mobile and internet usage, and growth of e-commerce (retail). This has unleashed unconventional job opportunities (without waiting for traditional/conventional forms of jobs), growth opportunities, flexibility and better work-life balance, and the option not to have a college degree, encouraging millennials to opt for gig-jobs/freelancing opportunities as opposed to the conventional work culture. 

The start-up ecosystem in India hires contract-based freelancers for non-core activities (engineering, product, data science and ML). While MNCs promote hiring options for niche projects, which is significantly contributing to the gig culture in India.

Major issues

Despite employment diversity, these myriad new forms of digital/app-based occupations present a paradoxical picture and share common existential problems – precarity, instability, joblessness, and informal employment conditions within ‘formal’ sector organisations (RoyChowdhary 2020). There is an absence of workplace entitlements due to contractual relationships.

In Indian cities, a transition from the manufacturing to the service sector in terms of increasing job opportunities for young people has not occurred. In other words, gig economy workers (from Uber, Ola, Swiggy, Zomato, Blinkit, Zepto etc,) normally do not have social protection (EPF or Pension), exposure to skill, and almost no bargaining power. This affects their working conditions or income.

During the Pilot, it was revealed that there is a significant difference in payment during and after the COVID-19 pandemic. People who were earning between Rs 12,000 and Rs 15,000 per week during the COVID-19 outbreak, are earning less than Rs 5,000-Rs 7,000 after the pandemic.

The incentive amount was drastically cut post-pandemic affecting their total income per month. The platform economy faces several structural barriers to social inclusion, especially for women and PwDs.

A 2020 survey by Flourish Ventures highlights that 90% of Indian gig workers lost their income during the pandemic. While they earned more than Rs. 25,000 per month before the pandemic, by August 2020, they were earning less than Rs. 15,000 per month and more than 33.3% were making Rs. 150 per day or less.

According to the survey, India stands to lose 135 million jobs because of the pandemic. This is likely to push the full-time workforce towards the gig economy.

Read more: E-shram report card: Workers complain of lack of information and interest from city agencies

Governance interventions

To aid gig workers, the government recently passed the ‘Code on Social Security’ 2020, ensuring workers with life and disability cover, accidental insurance, health & maternity benefits, old age protection, and others. Under this code, the central and state governments will primarily fund social security measures, with a nominal contribution by the aggregator (1-2% of their annual turnover).

In addition, the code proposed to establish a ‘National Social Security Board’, which will supervise and formulate the schemes for the well-being of gig and platform workers. Meanwhile, the Congress election manifesto assured to set up a ‘gig-worker welfare board’ with an allocation of Rs 3,000 crore seed money. In the Karnataka budget, Chief Minister Siddaramiah announced an insurance coverage of Rs 4 lakh for gig workers. These welfare measures promised during elections actually fizzle out after elections. Certainly, at present, there are no reliable governance measures for gig workers.

Recently, in February 2023, Zomato initiated ‘The Shelter Project’ – Rest Points (for delivery partners). A first of its kind was opened in ‘Vega City Mall’ in Bengaluru. Besides, there is a life insurance coverage of Rs 10 lakhs and medical cover worth Rs 1 lakh for all delivery workers. In addition, it is reported that the company offers out-patient department (OPD) support worth Rs 5,000 – extendable to families.

A pilot in New Delhi, Hyderabad, and Ahmedabad, a health coverage worth Rs 3 lakh extendable to families for delivery workers (for 2.3 years as a loyalty benefit) has been implemented. During the pilot, the food delivery workers who have been working for more than 5-10 years said that although they are aware of insurance scheme, they did not utilise it during their tenure. Some of them, especially those who are new, are not fully aware of the insurance benefits.

The need for social inclusion

There is a close association between formal-informal and gig economy. These new developments in Indian cities have led to growing ‘informalisation’ in terms of lack of jobs, and lack of income security, further increasing the ‘vulnerability’ and income inequality, subsequently weakening the position of labour.

There is a persistent skill mismatch between informal workers and the availability of jobs in cities. The political economy trend of joblessness has accentuated abject poverty and has halted the realisation of ‘demographic dividends’, which are necessary for promoting productivity and consequently, economic growth in Indian cities.

While the gig economy offers many opportunities, particularly for migrants seeking to earn a livelihood and gain work flexibility, the need for social inclusion through better regulation and protection cannot be ruled out.

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