The Growing Gig Economy in India: Opportunities, Challenges, and the Road Ahead

In recent years, the gig economy has surged in India, becoming a vital source of income for millions. Defined by short-term contracts and freelance work, the gig economy allows flexibility for both workers and employers. However, as the sector expands, it faces numerous challenges that need addressing. This article explores the state of gig work in India, focusing on its opportunities, difficulties, and potential solutions.

Understanding the Gig Economy in India

The term "gig" traditionally referred to temporary jobs or performance acts. However, over the past decade, it has evolved to encompass freelancing, particularly after the COVID-19 pandemic, which accelerated the trend. In India, gig workers are typically divided into two categories: service-based gigs and knowledge-based gigs.

Service-based gigs include low to semi-skilled positions such as delivery agents for companies like Uber, Ola, Zomato, Swiggy, Urban Company, Porter, and Zepto. In contrast, knowledge-based gigs are high-skilled jobs involving consultants, data scientists, and other specialized professionals.

Gig Workers in Numbers

Before the pandemic, India's gig economy employed approximately 3 million workers. This number skyrocketed to around 7.7 million by 2021, according to the Oxford Internet Institute's Online Labour Index, which shows that India's online labor market accounts for 24% of the global share—making it the leading country in this regard.

Despite this growth, a significant percentage of gig workers struggle financially. A survey by the National Council for Applied Economic Research revealed that, on average, gig workers in India earn only ₹18,000 per month, despite working approximately 69.3 hours per week—over 10 hours a day without any day-offs. Astonishingly, 75% of gig workers report facing financial difficulties.

Flexibility vs. Exploitation

The gig economy offers unique benefits for both employers and employees, including flexibility in work hours, the ability to work for multiple companies, and the potential to earn extra income through side jobs. However, the reality for many gig workers is starkly different. While they appreciate the autonomy, they also face exploitation and precarious working conditions.

Many gig workers are classified as "partners" or "experts" by their companies to avoid the legal implications of employer-employee relationships. This designation allows companies to evade obligations like providing health insurance, paying taxes, and ensuring a minimum wage. For instance, a joint study by the Centre for Labour Studies and Montfort Social Institute found that drivers often spend up to 40% of their earnings on fuel alone, highlighting the thin margins they operate within.

Impact of the Pandemic

During the pandemic, gig workers were labeled Covid Warriors or Lifelines, but many experienced significant declines in earnings. According to Ipsos Research's 2024 survey, 90% of gig workers reported that their salaries decreased six months after lockdown, with 47% unable to meet their expenses without resorting to borrowing money. This illustrates the precarious nature of gig work, especially in times of crisis.

Personal Stories: Voices of Gig Workers

The experiences of gig workers shed light on the harsh realities of this profession. For instance, Karan Singh, a construction worker from Delhi, turned to gig work after a friend introduced him to it. Despite using his last savings to buy a second-hand scooter for deliveries, he quickly found himself navigating a challenging landscape with little financial security.

Another example is Ankur, a cleaner for Urban Company who worked long hours to make ends meet. After an accident led to the cancellation of several jobs, his account was permanently blocked due to policy violations. Such stories are not isolated; many gig workers face account bans due to various reasons, often leaving them without recourse.

The Challenge of Worker Rights

The lack of formal recognition and protections for gig workers is a pressing issue. Traditional labor laws in India do not cover them, allowing companies to exploit loopholes. In 2020, the Indian government introduced the Social Security Code to define gig workers and propose benefits such as life insurance and maternity coverage. However, this legislation remains unimplemented.

Some state governments, like Rajasthan, have taken proactive steps to protect gig workers through laws that include registration, access to social security schemes, and grievance redressal mechanisms. For instance, the Rajasthan Platform Based Gig Workers Act 2023 mandates that gig workers be registered and entitled to various social security benefits.

Global Comparisons and Solutions

Internationally, several countries have implemented measures to protect gig workers. In the United States, the National Labour Relations Board encourages gig workers to form labor unions, while the European Union's Platform Workers Directive mandates rights and protections for gig workers across member states. Similarly, countries like Thailand and Malaysia provide health and accident insurance funded by a small cess on every ride or service.

As India grapples with its gig economy challenges, it can learn from these international examples. Implementing similar protections, such as minimum wage guarantees, health benefits, and transparent grievance mechanisms, could significantly enhance the working conditions for gig workers.

The Future of Gig Work in India

While the gig economy presents an attractive option for many, the systemic issues it faces must be addressed to ensure fair treatment and adequate protections for workers. As gig work continues to grow in popularity, both the government and companies need to prioritize the welfare of workers over profits.

Conclusion

The gig economy offers a mixed bag of opportunities and challenges. As we navigate this evolving landscape, it is crucial to recognize the contributions of gig workers to the economy while advocating for their rights and protections.

In today's convenience-driven world, we can order anything through a smartphone app, but we often overlook the gig workers who make this possible. According to a survey by the National Council for Applied Economic Research, an average gig worker works for 69.3 hours per week in India, working seven days a week, for almost 10 hours each day without any day-offs or Sundays. This is significantly higher than other workers who work an average of 56 hours per week.

Gig workers have better qualifications compared to other workers, but 75% of them face financial difficulties. On average, they earn only ₹18,000 per month, even after working tirelessly. The term "gig" originally meant temporary jobs or performance acts, and it has evolved into freelancing in the last decade, especially after the COVID pandemic. The gig economy can be divided into service-based gigs and knowledge-based gigs. Service workers are low to semi-skilled workers like delivery agents, while knowledge workers are high-skilled jobs like consultants and data scientists.

Gig workers work for companies like Uber, Ola, Zomato, Swiggy, Urban Company, Porter, and Zepto. They work differently from desk jobs and those delivering digital platform services in real life. There are many benefits for both employers and employees in the gig economy, such as flexibility, no contract with employees, and the ability to work when they want. Employees can work for multiple companies at the same time, and they can even work as a side job to earn extra money.

However, the situation is getting worse in reality. India's booming gig and platform economy had around 3 million gig workers before the COVID pandemic, but by 2021, this number reached 7.7 million. The Oxford Internet Institute's Online Labour Index shows that India's online labor market share is at 24%, making it the #1 country in the world in this regard.

Ipsos Research's 2024 survey found that 88% of gig workers consider gig work their primary source of income. However, 90% of gig workers reported that their salaries have gone down six months after the lockdown, and 47% of gig workers couldn't manage their expenses without borrowing money. During the Covid pandemic, gig workers were called Covid Warriors, Frontline Warriors, or Lifelines.