Not an employee. No Employer. No fixed working hours. Unlimited Income. Work flexibility. Freedom to work or not on any given day. These are the apparent and enviable characteristics of a gig worker. A utopian situation indeed! But the details show there is more to it than meets the eye. Undoubtedly, the gig economy has grown splendidly fast and is growing faster. It is already contributing a big sum to the GDP, to the exchequer, and more so to gig platforms (the details as we proceed further). But all this, to call a spade a spade, is at the cost of exploiting the gig workers. The gig workers, for example, are the food delivery boys and girls from Swiggy and Zomato-like digital platforms, the drivers of Uber, Ola, or similar ride-hailing services, or Amazon or other e-commerce delivery persons.

The labour ministry defines a gig worker as “a person who engages in income-earning activities outside of a traditional employer-employee relationship, as well as in the informal sector”. Similar is the NITI Aayog’s view which stresses gig work to be outside the traditional employer-employee arrangement. Gig workers can be broadly classified into platform and no-platform-based workers. Pla – t form workers are those whose work is based on online software apps or digital platforms. The non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full-time.

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The gig economy is facilitated by modern information technology, digitalization, use of computers, mobile phones, and mobile applications. It has rapidly grown over the years and is poised to grow much faster in the coming years. Some 7.7 million workers (2.6 per cent of non-agricultural workers or 1.5 per cent of the workforce) were engaged in gig work in India by 2020-21 as per NITI Aayog’s estimate although the accuracy of data is not guaranteed. The actual number could be more than double this number as per other estimates. The number is likely to reach 23.5 million (6.7 per cent non-agricultural and 7 per cent of the total) by 2029-30. The Boston Consulting Group puts the number of gig workers in India at 15 million in 2021 and estimates it to increase to 90 million.

It is likely to add 1.25 per cent to the GDP in the next eight to ten years. The gig economy’s world market size as per UEF in 2024 was $556.7 billion (equal to Rs. 47 lac crore) and it is likely to reach $1,847 billion (Rs.158 lac crore, or more if the rupee-dollar exchange rate increases) by 2032. The digital platforms are growing fast ~ 140 in 2010 to 777 in 2020 as per a ILO 2021 report. Undoubtedly, the gig economy, the offspring of new technology, and new modes of production and distribution, is booming and changing economic and social relations in tandem. The resultant outcomes – the challenges and opportunities, are not difficult to discern given the trends, experiences, and accumulated evidence of the gig economy, particularly of the digital platform- induced urban concentrated (deeply prevalent in about 300 cities) gig work. While technology is the facilitator and the medium for the gig economy its true begetter is the neoliberal economic policy and the fertile ground it created for the fast growth of the gig economy. Some key policy effects unmistakably drive home the point.

Firstly, the growth of the Indian economy has been jobless. The employment elasticity, (percentage change in employment in response to one percent change in economic growth) has been declining. For instance, between 2000 and 2012 employment grew by 1.6 per cent against the increase in Gross Value Added of 6.2 per cent. While the GVA further increased to 6.7 per cent between 2012 and 2019 employment grew at 0.01 per cent as per ILO-IHD’s India Employment Report 2024. Secondly, employment growth was of poor quality; 90 per cent of the workforce is informally employed. Due to the nature of employment growth since 2019, informal employment in total has been increasing. More casualization is observable, the gig work inclusive.

Thirdly, the production process has been capital-intensive and labour-saving naturally with the increasing profit maximization motive of business owners with the newfound support of economic policies. Fourthly, as the ILO report notes, “digitalization and introduction of new technologies are changing the structure of industrial employment. There has been a rapid introduction of digitally mediated gig and platform work, which are algorithmically controlled by the platforms and have brought about new features in control of the labour process. Increasingly, platform and gig work have been expanding, but it is, to a large extent, the extension of informal work, with hardly any social security provisions.” So, a gig worker’s life is neither free from bondage nor secure as is made out to be.

The so-called flexibility and choice not to work on any day means choosing to starve. What a driver gets every day, taking a ride hailing service as an example, after the expenses including the cut by the platform, is the subsistence amount for the family. That means no freedom to not work. Since the job is algorithmically controlled and monitored, the incentives, disincentives and penalties are promptly applied. The lives of other gig workers like food delivery or Amazon-like platform delivery partners are no different. They get insufficient incomes, and work 12 hours a day or more. They have no provident fund facility, no health insurance like ESI and no other social security benefit employers provide in the organized sector. There is no employer at all who can be made responsible for providing these things.

Although legislations are brought in here and there (for example Karnataka and Rajasthan enactments and Social Security Code 2020), gig work is deliberately kept outside the employer-employee relationship. Digital platforms that provide employment continue to be recognized as Aggregators while the workers are treated as contractors. This is not an unintended outcome of technology and changed production relations alone but the fruition of liberal economic policy, to say it at the cost of repetition. The government gradually withdraws from its role in economic activity firmly believing the theoretical underpinning of the market forces’ doctrine: “Business is the business of the business; the government has no business to be in business”.

With employment opportunities in other sectors getting bleak, and with increasing educated unemployment (28.7 per cent of unemployment among youth with graduate and above qualification in 2022; 11.5 per cent with secondary education; 6.1 per cent with elementary education and 3.2 per cent with below primary education), it seems higher the qualifications higher would be the unemployment. ILO data shows that educated youth are not willing to work in the agriculture sector. Urban migration has also been on the increase: the urban population is expected to increase from 483 million in 2021 to 607 million in 2030. In this background, since the organized sector is not able to provide any employment, youth are forced to take up gig work though remuneration from it is low and the working conditions miserable.

The only solace is that this sector provides employment. While employment elasticity in general is declining, that of the gig economy has been increasing significantly. The employment elasticity to GDP growth for gig workers was found to be above one throughout the period 2011-12 to 2019- 20 and was always above the overall employment elasticity, which means better opportunities in gig work. It is clear that the gig platform owners and the aggregators, are doing business using the unemployed youth (the majority of platform workers in developing countries, including India, were younger than 35 in 2021, as per an ILO study) and without providing them adequate or fixed wages, allowances, leave and other benefits, or old age security as provided to regular employees in the organized sector. This is because they do not treat gig workers as their employees nor does any statute mandate them to do so.

New technology and the consumers’ interest in getting services requires the services available through gig platforms. They are a societal necessity. But the exploitation of the principal providers, the gig workers, is a social evil. The solution lies in regulation of the gig industry by recognizing gig platforms as employers and gig workers as their employees. The existing labour laws should cover gig workers. No new laws are necessary. The existing laws are enough to regulate their working conditions like working hours, leave, old age security, etc. We must make the gig economy a part of the organized sector to save our youth and to take the best out of our so-called demographic dividend.

(The writer is a development economist and commentator on economic and Social affair)