The Gig Economy Paradox

Introduction

With yet another COVID-19 wave upsurging in India, the grounds seem shaky for the Indian economy. Nevertheless, the lives of the 'aam aadmi' have indeed changed with the rise of the gig economy. Its subsequent rise was to bring higher wages, workers' autonomy, higher living standards, and better days. The basic understanding of the business model of any platform or gig economy is that the platform, using software applications (apps), acts as a digital mediator between service providers and the service requesters (Shipra & Behera, 2020). Availing cab services, product deliveries, at-home services, and others form the gig economy's work. Could this model be the rescuer for declining economic health?

When the COVID-19 pandemic first struck India, gig workers undertaking essential services were portrayed as cape-wearing superheroes and rightfully so. However, this work model needs rethinking and close introspection of its end goals. The gig economy has formed a prominent part of the rising corporations within the global economy (Boston Consulting Group, 2021). With the emergence of technology-enabled gig work platforms, over 200 million people are considered part of the gig workforce globally. The gig economy has the potential to serve up to 90 million jobs (roughly 30% of India's non-farm workforce), add up to 1.25% to India's GDP in the long run, and create millions of new jobs across all sectors of India's economy (Boston Consulting Group, 2021). 

The Other Side

No matter how exciting the numbers look, the other side is dark. Over the past years, discourse and action have shifted their focus from the promised better days to the material conditions of the gig workers. In 2019, Zomato executives went on a massive strike after their incentives were slashed (BusinessToday, 2019). In 2021, several employees took social media by storm to highlight the cracks within the gig economy. In December 2021, women workers at UrbanClap set forth a demonstration after they were notified to pay a subscription fee. The workers (or partners as they are referred to) pointed out that the fee leads to plummeted pay (Chhabra, 2021). 

Contrary to popular belief, the working hours for gig workers are excruciatingly long. The gig workers take extra shifts to complete targets and meet ends, making their workday last 12-14 hours. 

Maintenance of vehicles, fuel costs, company merchandise and access to digital means, cut down on earnings. The long term sustainability of such jobs must be put under scrutiny. How does the gig worker ensure a dignified living wage even after unhealthy working conditions? The pandemic has highlighted the need for social security. If large tech companies wash away their hands of accountability, will the social foundation of the economy ever escape shaky grounds? 

A healthy economy results from the people thriving in a safe environment. The workers demand a mechanism where their wages, security and health are not compromised. The tech-based communication channels are often unbefitting to address genuine concerns (Shroff, 2021). Moreover, the workers want autonomy and power over the decisions that significantly affect their livelihood and welfare.

For this section of the service sector that is so up-to-the-minute and rampant, a multitude of challenges remains unresolved. Apart from the conventional alienation of gig workers from the standard security nets of formal workers, challenges like pay cuts, demanding work hours, exploitation, and biased power dynamics, threaten the entire foundation of this 455 billion dollar industry. 

The part of the gig economy that concerns us usually stems from the class bias of high-skilled and low-skilled gig workers. Low or unskilled, also known as blue-collar gig workers make up almost 38% of the total gig work demand in India (BCG, 2021). Unskilled gig workers are plentiful in India. It’s this competition that lowers their bargaining power and wages in the market. Although the basic premise of the gig economy is based on an apathetic employee-employer relationship, the surge of moral and ethical concerns in India leave room for amendments. 

The Way Forward 

A classic solution that frequents this discussion is to mend the accountability of businesses when they hire gig workers. In other words, worker demands like job insecurity, flexibility, deferred payments, decent working and wage conditions, would be somewhat resolved if the employers took responsibility and recognised gig workers as employees. This solution, however, defeats the purpose of having a system that promises freedom to offer specialised short term work without having to pay for the cost of hiring an employee and taking accountability when looked at from the employers perspective.

Despite being a  highly beneficial model for the Indian job market, which has 92.4% informal workers (including outsourcing), the gigs only look good on paper as of now. Its large-scale adoption presents structural problems and hinders the sustainability of the gig economy model. For gig work to be a viable alternative to the unorganised sector, the model requires regulation via a policy framework that secures equal benefits for every party involved in a gig contract. Benefits such as safety at work, medical insurance, job security and defined payment structure, even if for a limited period, will go a long way in addressing the uncertainties associated with temporary employment (Aranca, 2021). The participation of lawmakers and businesses in making the platform economy sustainable is imperative. 

References

Boston Consulting Group. (2021, March). Unlocking the Potential of the Gig Economy in India. https://www.bcg.com/en-in/unlocking-gig-economy-in-india

BusinessToday.In. (2019, September 17). Zomato delivery boys go on strike in Mumbai, Bengaluru after food app cuts incentives. Business Today. https://www.businesstoday.in/latest/corporate/story/zomato-delivery-boys-executives-strike-in-mumbai-bengaluru-after-food-app-cuts-incentives-228315-2019-09-17

Chhabra, R. (2021, December 24). Protest Called Off But Service Professionals at Urban Company Say Fight Will Continue. NewsClick. https://www.newsclick.in/protest-called-service-professionals-urban-company-fight-continue

Shipra, S., & Behera, M. (2020, December 24). Gig Work and Platforms during the COVID-19 Pandemic in India. Economic and Political Weekly. https://www.epw.in/engage/article/gig-work-and-platforms-during-COVID-19-pandemic

Shroff, K. (2021, December 29). Inside the Winter of Discontent for India’s Gig WorkersÂ. The Wire. https://thewire.in/labour/india-gig-workers-protests-pil

A. (2021, June 3). Article headline. Aranca. https://www.aranca.com/knowledge-library/articles/business-research/how-can-gig-economy-become-sustainable 

Contributors, E. T. (2021, August 4). The challenge with the gig economy. The Economic Times. https://economictimes.indiatimes.com/jobs/the-challenge-with-gig-economy/articleshow/85031089.cms