GIG ECONOMY

The gig economy workers, as defined by the 2019 Labour Codes, encompasses workers engaged in non-traditional work arrangements outside the conventional employer-employee relationship. This sector covers various employment forms, including short-term, contractual, and independent contractor roles, also termed as the freelancer economy, agile workforce, sharing economy, or independent workforce..

FEATURES OF GIG ECONOMY

1. Nature of Gig Economy : The gig economy revolves around temporary or freelance jobs, often facilitated through online platforms.
2. Beneficiaries : It benefits workers, businesses, and consumers by offering adaptability to varying demands and flexible lifestyles.
3. Time Flexibility : Workers enjoy the freedom to choose their working hours according to their preferences.
4. Income Flexibility : The gig economy provides individuals with opportunities to earn extra income due to its inherent flexibility.
5. Sector Composition: About 47% of gig work comprises medium-skilled jobs, 22% high-skilled, and approximately 31% low-skilled roles.
6. Dominant Roles: In 2019-20, over 52% of gig workers were drivers and salespersons, indicating their significant presence in the gig economy.
7. Industry Distribution: The retail trade and sales sector employed 26.6 lakh gig workers in FY20, while the transportation sector employed about 13 lakh workers. Additionally, roughly 6.2 lakh individuals were involved in manufacturing, and another 6.3 lakh were engaged in finance and insurance activities.

CLASSIFICATION OF GIG ECONOMY

• Platform-based Gig Workers : Engage in work facilitated by online apps or digital platforms, including ride-hailing, food delivery, e-commerce, and online freelancing.
• Non-platform-based Gig Workers : Operate outside traditional employer-employee relationships and include casual wage workers and own-account workers in sectors such as construction, domestic work, and agriculture.

KEY HIGHLIGHTS OF THE STUDY

1. Long Working Hours : Nearly a third of app-based cab drivers work over 14 hours a day, with more than 83% working over 10 hours and 60% over 12 hours.
2. Caste Disparities: Over 60% of drivers from Scheduled Castes and Tribes work over 14 hours daily, compared to only 16% from the unreserved category.
3. Low Income: 43% of participants earn less than ₹500 a day or ₹15,000 a month after expenses. For app-based delivery persons, 34% earn less than ₹10,000 monthly, with 78% working over 10 hours daily.
4. Demographics: 78% of respondents are aged between 21 to 40 years among 5302 cab drivers and 5028 delivery persons surveyed across eight cities.
5. Health Risks: Demanding work hours lead to physical exhaustion and increased risk of road accidents, especially due to pressure from e-commerce platforms for speedy deliveries.
6. Financial Strain : 72% of cab drivers face difficulty managing expenses, with 76% of delivery persons struggling to make ends meet. 68% of cab drivers' expenses exceed their earnings.
7. High Commissions : 35% of respondents report companies deducting 31-40% of commission rate per ride, higher than the officially claimed 20%.
8. Customer Misbehavior: 72% of drivers and 68% of delivery persons report negative impacts from customer behavior.
9. Inability to Take Leaves : 41% of drivers and 48% of delivery persons are unable to take a single day off in a week.
10. ID Deactivation Issues : 83% of drivers and 87% of delivery persons report negative impacts from ID deactivation, affecting their livelihoods significantly

REASON FOR RISE IN GIG ECONOMY

1. Changing Work Preferences : Millennials prioritize flexibility and autonomy, driving the shift towards gig work due to hectic lifestyles and evolving career expectations.
2. Startup Culture: Startups opt for contractual freelancers to minimize fixed costs linked to full-time employees, fueling the gig economy's growth.
3. Freelancing Platforms : The rise of freelancing platforms streamlines connections between gig workers and businesses, facilitating smooth transactions and boosting gig economy growth.
4. Post-Pandemic Transition : The pandemic-induced layoffs have prompted individuals to explore freelance opportunities as an alternative, further accelerating the expansion of the gig economy.

ADVANTAGES OF GIG ECONOMY

Advantages for Workers

1. Profit through Diversification : Gig workers have the opportunity to boost their income by taking on multiple gigs concurrently, fostering financial stability and potential growth.
2. Empowerment and Flexibility : The flexibility of gig work empowers women and retired individuals to manage their work alongside personal responsibilities, granting them control over their schedules and lifestyles.
3. Cost Savings and Convenience : Gig workers benefit from reduced commuting expenses and the convenience of working from home, enhancing their overall quality of life and work-life balance.

Advantages for Employers

1. Efficiency and Productivity : Gig workers often display heightened efficiency and productivity levels compared to traditional employees, leading to improved business performance and expansion.
2. Cost Savings : Employers enjoy savings on benefits, office space, and training costs typically associated with full-time positions, allowing for more efficient resource allocation and decreased overhead expenses.

CHALLENGES FACED BY WORKERS IN GIG ECONOMY

1. Increase in Voluntary Unemployment : The gig economy has led to an increase in voluntary unemployment as some workers prefer the flexibility and autonomy of gig work over traditional employment.
2. Disrupting Work-Life Balance : While gig work offers flexibility, it can disrupt the work-life balance, sleep patterns, and daily activities. Workers must always be available for gigs, regardless of their other needs, leading to a constant search for the next opportunity.
3. Job Insecurity : Gig workers lack job security, often engaged on a project or assignment basis rather than as permanent employees.
4. Income Instability : Fluctuations in income are common for gig workers due to the irregular and unpredictable nature of gig work.
5. Lack of Formalization : Many gig workers operate in the informal sector, limiting their access to credit, government support programs, and resources.
6. Lack of Legal Protection & Social Security : Gig workers are not covered under labor laws, lacking legal protection in cases of workplace issues. They also lack access to social security benefits like health insurance and retirement benefits.
7. Unequal Bargaining Power : Gig workers may struggle to negotiate fair compensation and working conditions, especially when competing against a large pool of workers on digital platforms.
8. Training and Upskilling : Many gig workers lack necessary skills and opportunities for upskilling and career advancement.
9. Social Stigma : Gig work is sometimes seen as temporary or low-paying, leading to social stigma and lack of recognition for gig workers' contributions.
10. Payment Inconsistencies : Absence of a minimum wage guarantee leaves workers vulnerable to financial instability during crises.
11. Workplace Conditions & Interaction : Lack of forums capturing gig workers' concerns hampers platforms' ability to address challenges effectively.

NEED FOR PROVIDING SOCIAL SECURITY BENEFITS TO GIG WORKERS

1. Economic Security : Gig workers face job insecurity and income uncertainty, necessitating social security benefits like unemployment insurance, disability coverage, and retirement savings programs to ensure economic stability.
2. More Productive Workforce : Access to healthcare benefits promotes gig workers' well-being, leading to a healthier and more productive workforce.
3. Equity in Opportunities: Providing social security benefits levels the playing field, addressing disparities in working conditions and compensation faced by gig workers.
4. Long-term Financial Security : Without retirement plans, gig workers may struggle financially in the future, highlighting the need for social security benefits to reduce reliance on public assistance programs.

CHALLENGES IN PROVIDING SOCIAL SECURITY BENEFITS

1. Classification and Excess Flexibility : Determining company obligations towards gig workers amidst blurred employment boundaries and flexible work arrangements poses challenges.
2. Funding and Cost Distribution: Identifying appropriate funding mechanisms becomes complex in the gig economy where workers are often self-employed.
3. Coordination and Data Sharing: Efficient data sharing among gig platforms, government agencies, and financial institutions is crucial but challenging due to gig workers' multiple engagements.
4. Education and Awareness: Many gig workers may lack awareness of their entitlements, highlighting the need for education about social security benefits.

GOVERNMENT’S INITIATIVES RELATED TO GIG WORKERS

• The Code on Social Security, 2020, mandates gig employers to contribute to a Social Security Fund.
• The Code on Wages, 2019, ensures a universal minimum wage for gig workers across sectors.