Gig economy faces grim reality

THE Covid-induced lockdown, which was imposed five years ago, witnessed an exponential rise in the demand for gig workers, who delivered groceries and other goods to people confined to their houses. Though they were hailed as frontline warriors, their wages and perquisites shrunk as the pandemic progressed.

Studies on gig workers reveal that despite a high demand for online deliveries during the Covid era, they received little support from the online platforms that had employed them. It must be clarified that gig workers are not described as employees but ‘partners’. Even the e-Shram portal of the Ministry of Labour and Employment calls them workers who are not part of the traditional employer-employee relationship and work on a contract basis. This takes them out of the purview of traditional labour codes and makes their position somewhat fuzzy.

During the pandemic, such platforms would highlight the stringent hygiene standards of gig workers to reassure customers that there was no risk to their safety. The workers themselves were highly vulnerable to contracting infection, while consumers were freed from the responsibility of declaring their disease-free status. Some studies found that it was extremely difficult for such workers to communicate with platform managements to voice their concerns. Wages reportedly became stagnant or reduced in many cases. It is during this period that customers began tipping delivery workers.

As their grievances went unheard, these workers banked on family support to survive this difficult phase. The lockdown period was thus a time of huge uncertainty for gig workers. Contact-intensive fields like beauty treatment and taxi services were hit hard, leading to more job losses than gains despite the avalanche of online activity.

The gig economy has again come into sharp focus, with the 2025-26 Budget having included workers in this sector under the auspices of a government health scheme, while a plan for registration is also underway. This has been followed by reports that gig worker hiring is going to go up significantly in the coming months.

Manpower consultancies are predicting that hiring of temporary workers will shoot up in the June-August quarter. This would largely be in the areas of q-commerce (quick commerce), e-commerce, consumer durables and electronics, hospitality, FMCG and retail as well as logistics and manufacturing. The demand for temporary and gig workers is expected to be as high as one lakh during this quarter. What is interesting is that this requirement is not just from well-known online companies but also from brick-and-mortar firms, including the air-conditioning and refrigeration sector as well as the hospitality industry. Technicians are apparently expected to be in great demand, as well as chefs, kitchen staff and hotel front-desk personnel. Yet these will only be temporary seasonal jobs rather than permanent positions that provide much greater security.

It is the uncertain nature of temporary and gig employment that has prompted the government to give them the umbrella of a public health scheme that would at least reduce crippling expenditure on medical care. Registration would also provide better data on this relatively new worker category and enable better targeted assistance.

A 2022 study by the Niti Aayog estimated the size of the gig workforce to be 7.7 million and projected that it would rise to 23.5 million by 2029-30. It found that 47 per cent of the workers were in medium-skilled jobs, 31 per cent in low-skilled jobs and 22 per cent in the high-skilled category. The 2020 Code on Social Security even has a separate provision for a fund to support welfare measures for gig workers. This has yet to see the light of day, even as talks among stakeholders are reportedly underway.

The promise of government aid to gig workers has led to online platforms warning about excessive regulation in the sector. The argument is that these platforms offer easy entry-level jobs, provide adequate wages and even offer life and health insurance without having any legal mandate. It is undoubtedly true that temporary workers cannot be treated on a par with permanent ones and plans to impose criminal liabilities on these enterprises for minor issues need to be ditched once and for all.

It cannot be denied, however, that there is a need for online entities in all areas, be it food delivery, taxi services, e-commerce or professional services, to be more responsive to the grim reality of a gig worker’s life. It should be a cautionary signal that a segment of consumers even provide food packets to exhausted and famished delivery workers arriving at their homes. Many users of online taxi services have encountered drivers who are sleep-deprived due to the compulsion of taking on too many trips. The ‘partners’ are clearly not being given sufficient time to recuperate between assignments.

At the same time, welfare provisions for the gig economy need to be evolved by the government in collaboration with online platforms as well as the conventional industry that relies on temporary workers. While health insurance is a laudable first step, issues relating to disability, accident insurance and maternity cover along with sustainable wage levels need to be discussed thoroughly. This needs to be put on the fast track if the gig worker is to be given dignity and a small measure of security in his or her admittedly all-important job.