Gig Economy- Prospects and Challenges

A gig economy is a free market system in which the organisations employ contractual, non-permanent employees for short-term engagements. The Global Gig Economy Index report has ranked India among the top 10 countries.

Gig Economy in India: It is estimated that out of 21 lakh jobs that will be created in the metros in 2019-20, 14 lakh jobs will be created in Gig Economy. Food and e-commerce companies account for the major share of job creation in the Gig Economy.

REASONS FOR THE DEVELOPMENT OF GIG ECONOMY

• Rapid growth of the digital communication wherein the workforce is highly mobile, and work can be done from anywhere without any geographical barriers.
• Adoption of Gig Economy reduces the operating costs of the firms since the companies would not be liable to pay pension and other social security benefits.
• Flexibility to the workers wherein they can switch jobs frequently and choose work which suits their area of interest.
• Recent slowdown in the formal employment creation has also boosted the development of Gig Economy.

CONCERNS WITH GIG ECONOMY IN INDIA

• It leads to creation of informal sector jobs and thus hinder the optimum utilization of demographic dividend.
• Current Indian labour laws do not explicitly consider gig workers. Acts like maternity benefit, sexual harassment at workplace etc are silent or unclear.
• Absence of social security benefits such as insurance, pension, provident fund etc.
• Lack of Job Security and presence of workers from across weakens the bargaining power.  
• Temporary nature of transactions undermines the need to build long-term relationships between buyers and sellers

PROTECTION PROVIDED TO GIG WORKERS UNDER LABOUR CODES

Labour Codes that seek to introduce Labour Reforms in India have legally acknowledged the presence of Gig Workers in the economy. For example, the Code on Social Security, 2020 provides for the registration of all the Gig workers. It calls upon the Central and State Governments to formulate schemes to ensure social security benefits such as Insurance for the Gig workers.

It also empowers the Government to set up Social Security Funds for their benefit. The contribution to these funds may be funded from contributions of Centre, State and aggregator platforms such as Uber, Zomato etc.

CONCERNS/ CHALLENGES

Lack of Labour Rights: Platform workers often have limited control over their work (for instance, in some cases they cannot set prices, they are required to wear uniforms, they cannot choose the order of their tasks, etc.). This in turn makes them prone to the exploitation of the platform-based companies.

Greater control by Employees: It is being said that the Gig/Platform workers enjoy higher level of freedom and flexibility in their work. However, these advantages get over-shadowed by their higher dependence on the platforms. Take for instance, if a person wants to work a cab driver or food delivery agent, he needs to own vehicle. Since poor people do not have access to loans, they come to be dependent on the platforms for the loans provided by them. This in turn reduces the flexibility associated with the Gig Economy. The Workers would have to work according to the needs and requirements of the Platform companies.

No Guaranteed Benefits: Industrial workers are automatically guaranteed social security benefits such as Provident Funds, Insurance, Maternity benefits etc. However, such benefits are not automatically extended to Gig Workers. The Central and State Governments are required to come up with schemes to provide these benefits. So, the social security benefits for the Gig Workers depend upon the political will of the Government.

No Guaranteed Contribution by Aggregator Platforms: Code on Social security mandates industries employing workers above a certain threshold level to compulsorily contribute towards social security benefits such as Provident Fund and Insurance. However, as far as Gig Workers is concerned, the language in the code does not provide for compulsory contribution by the aggregator platforms. Hence, it is left open to the Government whether to seek contribution from the aggregator platforms or not.

No legal Rights for Gig Workers: Industrial workers are given legal rights over the various aspects of work such as Payment of Minimum wages, safe working conditions, right to strike, right to form trade Unions etc. However, such rights have not been recognised in case of Gig workers.