Abstract:
According to the World GDP Ranking, India is currently the Fifth largest economy in the world and is slowly in the transition of moving from a developing to a developed country in the near future. There are many new avenues which are being visualised and created for the economic growth and with the increase in usage of technology and Artificial Intelligence (AI), there has been a recent surge in the growth of Gig workers in the country. It is different from the traditional market place where usually buyers and sellers meet but in this type of economy, a digital app is created which helps the customers to choose the resources they require and this app also assists the employees to help them reach the customer’s place. The Gig Economy is also referred to as Platform Economy or Platform Capitalism. The development in various trends of the technology has led to an alteration in the way a business operates. This research aims at looking onto identifying the reasons as well as the concerns regarding the growth of Gig Economy. The government must ensure to bring about various amendments and improve the present laws for the better functioning of the employees and to not allow the corporate capitalism exploit the working-class.
Keywords:
Gig Economy, Capitalism, Working-Class, Gig Workers, Capitalists
Introduction:
Capitalism is an economic system in which the capitalists own the factors of production which include Land, Labor, Capital and Organisation and control these factors according to their own interests in the pursuit of profits. They have the power to decide the wages for the working-class, take big decisions regarding the investments and also analyse about how much of the profits to be retained within the business and finalize the value of the dividend to be provided to the shareholders. The working-class at the other hand, who are employed by the capitalists perform their work and operate the factors of production and receive wages or salary for the same. The working-class has no rights to govern the factors of production or in the profits generated by the business. This reduces the power of the working-class has they are the receiving end and not the providing end. India, as a country has adopted two different models of system namely Capitalist and Socialist, which is the reason why India is referred as a Mixed Economy.
Research Methodology:
This research consists of a Descriptive approach and it is based on secondary sources such as websites, articles, newspapers, videos.
Review of Literature:
Nick Srnicek argued that gigs had already existed for a long time but the new Platformization, will have a widespread impact on the economy as this builds an infrastructure for different parties to have an interaction.
History of Gig Economy:
The history can be traced long back to the 1910s jazz sessions. These musicians first introduced the term “Gig”, to refer to their musical performances. Therefore, these musicians were pioneers of the gig work as they worked on a per-job basis. In 1929, the world witnessed one of the severe downfalls as there was the Great Depression, which began in the United States. It was one of the longest and severe depression which led to changes in macroeconomic policies and changes in economic institutions. The main issue with the depression was such that it caused decline in output, employment and deflation across various parts of the world. It was one of the worst times in American history as the unemployment rate increased to 25%. This was a difficult situation for the people as they had to migrate from places and take up odd jobs to satisfy the needs and to find a steady source of income. To mitigate this situation, there were temp agencies set up to provide the people with temporary jobs and also help organisations to identify these temporary workers. So, the first agency was set up in 1940, which provided jobs to typists and other staff on a temporary basis. During the 1990’s there was a huge surge for the Gig Economy. As slowly as the growth of Technology and the Internet also assisted for the growth of the Gig Economy. It led to the creation of Craigslist, which created informal or formal job postings and this brought about a change in the perception of people about the job market. The introduction of technology and the Internet also led to help in increasing awareness about Freelancing and also significantly contributed for the development of the Gig Economy, as the first Freelancing website was created. Later on, the 2000s were also considered very important for the growth of the Gig Economy. Firstly, with the creation of the Holiday destination named AirBnb and another major force named Uber. Many other platforms also started entering into the economy along with an increase in the number of Freelancing sites as well.
Types of Gig Workers:
The Gig Workers can be classified into four workers:
- Ride-Hailing Drivers: It refers to those individuals who work in Uber, Ola etc, provide transportation services through an app. Their main aim is to pick up and drop the passengers at their destinations.
- Freelancers: It refers to those individuals who are skilled and offer their services in terms of Graphic Designing, Content Writing etc. They utilize websites like Fiverr to find clients and complete the projects. They have the autonomy in deciding the price for the task as well as can work for multiple projects simultaneously.
- Delivery Drivers: It refers to those individuals whose role is to deliver food or packages to the residences of the customers. Companies like DoorDash help in linking the customer as well as the driver for the required task to be performed.
- Task-Based platforms: It refers to those individuals who help in performing various tasks. Companies such as Taskrabbit connect people who help with the workers. This task can be different for each individual and can range from cleaning house or arranging furniture of a house etc.
Examples of Gig Economy Applications:
- AirBnb: It deals in the avenue of housing property. It is an online platform which connects customers who are looking for a holiday destination and are searching for their accommodation purposes and parties who want to rent their property.
- Uber: It is an app which would help customers travel from one place to another with differences in viewing of fare for a car and an auto. They also have features for ride sharing and the drivers receive commission for every ride. This takes the major portion of the economy as it provides employment to many people.
- Lyft: This app is also identical to Uber and it also provides services such as ride-hailing, vehicles for hire, bicycle- sharing system and rental cars.
- HopSkipDrive: This app looks to bridge the commutation of small children to their respective activities in case the parents are busy and cannot drop them. They have well trained and skilled drivers and also those who have childcare experience.
- Swiggy: It is a food delivery app, wherein the customers have the option of choosing the food from the restaurant they would like to have and the app helps in connecting this information with the available workers and they earn money by delivering the food to the customers’ place.
There are many other apps which have set a tone in the market due to their personal image, word of mouth and various other reviews and ratings of customers through apps or in common platforms like review websites.
How does the Gig Work?
The main aim of the workers in this type of market is to finish the task such as delivering a lecture or housekeeping service or the barber would visit the customers place and perform the activity. The workers have a choice that either they are willing to work on a project basis or specified time limit. In this economy, the company is not the employer but it is just a mediator between the customer and the worker. Thus, it works on a technology platform that helps in connecting workers who are looking for flexible work arrangements and a customer who wants the service to be provided and it operates in a centralized location, either on a website or an app.
Reasons for the Growth of the Gig Economy:
The main reason is absolutely due to the technological advancements and various other innovations which assists the functioning of the business. The growth of the Internet has also simplified many complex tasks and made it easier for workers and businesses to communicate with each other more efficiently. It has created more opportunities for the freelancers as now they can take up international projects and finish the task just sitting at home. This Freelancing gives them various benefits which traditional jobs don’t provide as in this, they can choose the number of hours the person would work and the person can also specify the price for the task performed. Moreover, the companies also are interested in this as the employees are temporary, the company need not spend huge funds for training sessions, need not provide any kind of benefits to the employees and they can easily remove the employees as well and also this reduces their investment. The Government’s Liberalisation policies have created an open market and also reduced the interference of the government in all the sectors of the economy. This is more attractive to those individuals who would want to have flexible work arrangements and independence as this will help the people to balance out between personal and professional life. This is also suitable to those people who want to improve their livelihoods with side income hustles, as nowadays the Inflation rate is increasing at a higher rate compared to the salary rate of the citizens of the country. The growth of E-commerce can also be considered as a reason which led to increase in demand for delivery, which in turn has a significant impact on the Gig economy.
Pros of Gig Work:
- Flexibility: The biggest advantage with this is that the autonomy and the independence which the workers can enjoy as he/she can schedule his/her own timings for the task to be performed.
- Test Drive Something New: For many people who are involved in this it can be a side hustle, but for others it can help them to figure out their career and understand which works best for them.
- Wide Range of Jobs: Working across various projects and teams can bring in a lot of experience to the person and he is helpful in the future course of work.
Cons of Gig Work:
- Lack of Benefits: Under this economy, the workers are considered as Independent contractors and not employees, therefore the benefits would not be provided by the company.
- Inconsistent Income: In this economy, the worker would receive the income only after completion of a task. The main issue is that there is no pre decided income which the worker would receive.
- Burnout: As the workers would perform multiple tasks at odd hours it would become very tiring and stressful for the worker.
- Need for more Discipline: As this would help the workers enjoy more freedom, but this would create indiscipline as they must work very hard in order to ensure that they deadlines are met and the quality of the performance is maintained as there is a heavy set of competition prevailing in the market.
Concerns of the Gig Economy:
The main concern is regarding the relationship shared between the Capitalists and the Gig workers. There are no proper basic amenities provided to them, which employees can entail. The workers are referred to as Independent Contractors and not as employees. So, in this economy the workers are responsible for all the operational costs. This makes it very unprotected for the workers to function. India’s Gig Economy is booming but the people who are below in the pyramid are not really benefiting from this growth. A recent survey which had the participants of 10000 cab drivers and delivery personnel, highlighted the ill effects of working in this sector like long waiting hours, earnings that don’t satisfy the expenses of the household, high stress etc. It also specified that 41% of cab drivers and 48% of delivery personnel reported an inability to avail leave for even a day in a week. The lack and struggle of time is also a problem which has adverse impacts on the well-being of the workers, as 99.3% of the workers have specified that they are suffering from physical issues like body pain and many mental issues such as anxiety, stress etc. The workers have very little power in terms of freedom and have no say in asking for additional salary or benefits. This is advantageous for the Capitalists, as they deal with the concept of Profit Maximization and Risk Minimization and it works on Socialize Risk and Privatize profits. The ill effect is that the safety of the workers is also not considered as irrespective of the weather and the distance, the item should be delivered within a certain time limit or else the commission which the worker would receive would be reduced. The main problem is also the lack of social security and other benefits. For E.g.: If a person is delivering and is met with an accident and if the person expires, the company would not provide any insurance to be availed. Due to all these, there exists an exploitative relationship between Capitalists and the workers. There is an inverse interdependence, because they both don’t benefit equally from the relationship. This is majorly because Capitalists have different interests and Workers have different interests. If the wages increase then the profit would reduce and if the wages reduce, then the profits would increase. There is a conflict of interests between both the classes. The influence exercised by capitalists on the state is also a huge disadvantage for the working class, as generally the capitalists provide various incentives to the government. This can only be resolved by Collective bargaining by the working class which refers to the unity of labour, organising themselves properly by forming a union to satisfy their needs. The government must also provide support by bringing in various amendments to the labour law to ease the functioning of the working class.
Legal Perspective:
To support the workers in the unorganised sector, the government passed Four labour codes. The Code on Social Security 2020, was one of the codes which was passed due to various recommendations specified by the Second National Labour Commission. According to this Code, the Central Government will form a National Social Security Board, which would help in developing various schemes which would provide benefits for the workers in the unorganised sector. The Industrial Relations Code, 2020 unified the law and replaced three of India’s labour regulations. It provides rules in terms of Employment, dismissal, layoffs, strikes and Collective bargaining etc, it tries to simplify India’s industrial system. The Code of Wages 2019 and the introduction of all these new codes clearly shows the government’s efforts in trying to acknowledge the gig workers and safeguard them and provide protection in terms of social security benefits. There are efforts being taken up by the Indian Federation of App based Transport Workers (IFAT), as they filed a Public Interest Litigation in the Supreme Court questioning the “Right to Social Security ” to all the workers in the gig economy. Another important case law is All India Gig Workers Union v. Uber India Systems Pvt. Ltd, where workers have filed a case against the ill practices of Uber for not providing them with basic salary and other benefits. This can lead to providing fair compensation and an attempt to redefine the relationship between the employer and the employee. Rajasthan, becomes the first state in the country to pass a law ensuring social benefits to the gig workers as well. The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 has introduced Platform Based Gig Workers Welfare Cess, which is a monthly contribution from aggregators and primary employers up to a maximum of 2% and a minimum of 1% of every gig economy transaction. The government will also institute a board named Rajasthan Based Gig Workers Welfare board, which will provide information about schemes on social security such as medical insurance etc. Looking on to the initiative taken by the Rajasthan government, the Karnataka Government has also announced that they would provide a free life and accident insurance up to 2 Lakhs to all Gig based workers.
Impact in India:
There are approximately 15 million skilled freelancers which is equivalent to 40 percent of the total freelancers worldwide. There was a report published by India’s Public Policy think tank, NITI Ayog on ‘India’s Booming Gig and Platform Economy’, the share of workers participating in this sector increased from 0.54% in 2011-2012 to 1.33% in 2019-20. According to a report published by NASSCOM, the Indian Gig workforce is going to increase from 7.7 Mn in FY21 to 23.5 Mn by FY30, the gig workers will increase from 1.5% in FY21 to 4.1% by FY30. The report also specified the gig workers in terms of expertise: 31% of the workers are indulged in low-skilled work, 47% of the workers are indulged in medium-skilled work and 22% of the workers are in high-skilled work. The pandemic also initiated the Work from Home model, which helped gig workers find out various other opportunities in every sector possible. According to ASSOCHAM, the annual growth rate of the gig economy is 17%. According to a Boston group report, the gig economy has the potential to provide 90 million jobs in the non-agriculture sector alone. According to a report by the CIEL group, 55% of the organisation has hired gig workers for their work. This shows the huge share of gig workers in the organisations. The CIEL, surveyed 400 pan India organisations and 1200 white collar gig workers, specified that 38% of the workers are choosing this due to the flexibility option available to the worker. The key sectors which would contribute to the hiring of the workers are Automotive, IT, Engineering etc. This also provides Financial Independence to the women workforce, which would help them have a higher status and help in improving their decision-making power.
Suggestions:
The government must introduce various policies and strengthen laws which would reduce the harsh behaviour of the capitalists and improve the relationship between the capitalists and the workers. They should also ensure that the workers receive social benefits and other essentials which every worker would receive. The government should also ensure that they strengthen the gender laws, if the employee is a female, for E.g. If the delivery person is a female and during the delivery time if the customer does not behave properly with the worker, then the injustice would be curtailed. This would help in increasing the female workforce in the employment arena. It is majorly an urban phenomenon but with proper enforcement, it can be extended to the rural areas which would help in development of rural areas and in turn develop the country as a whole and it would provide employment opportunities as well. There must be a proper contract between the parties (platform and the gig worker) specifying the terms and conditions of the work in order to ensure the smooth functioning as opposed to verbal agreements. Various skill-based programmes can be provided to the workers to make the workforce ready for the competitive future. To make the situation better, establishing a unified global standard which would protect the rights of the gig workers is highly required.
Conclusion:
The growth of the gig economy is a significant change in the nature of work. It puts a huge pressure on the government officials, policy makers, and the platform to properly collaborate and create an inclusive and equitable work environment. The labour laws must be properly amended and must be in accordance with the global standards. With the flexibility and independence provided, the gig economy is here to stay and slowly many more would be attracted to this. It would continue to stay and grow as with new advancements and technology improvements; it will definitely assist the growth of the economy. It is a good sign as with this there can be an increase in the employment generation but the government must ensure that the grievances of the workers are properly understood and met with them accordingly.
T. Venkata Nagarjuna
OP Jindal Global University