India's Gig Economy: How the 'No Rules' Industry Renders Workers Helpless

Since workers are treated as 'freelancers', companies shirk off all responsibilities and liabilities towards them.

6 min read

The phone screen shows the Uber cab inching closer to the location. As the icon for the cab moves closer, the lines between the algorithm and humans get blurred – it is quite easy to ignore that there is a human, a driver, a worker sitting behind the wheels.

Uber, Ola, Swiggy, Zomato, Amazon, Big Basket, Urban Company, etc, have become fairly commonplace for the urban populace not just in metropolitan cities but also in Tier II cities in India. These companies operate via platforms or digital interfaces that take the form of websites or smartphone/computer applications or apps. In the world of gig economy, consumers log in to platforms, and service providers or freelancers are onboarded. These service providers are fairly heterogeneous – they can be coders, graphic designers, psychologists, cab drivers, or even beauticians. A “gig worker” is one who does these kinds of temporary jobs.


A Win-Win Situation for Companies

The reality of ‘gig’ work today has moved far from the original meaning of ‘gig’ – a slang word used by entertainers to describe a one-time job or performance. A report by People's Union for Democratic Rights (PUDR), based on fact-finding investigation including workers’ interviews, consulting experts, publications, court judgments, unions, finds that it is more appropriate to treat gig workers at the lower-end as workers, not freelancers.

The business model of gig economy is based on having a large pool of freelancers or workers that is matched to the fluctuating demand for services. The ever-expanding supply of workers means that workers compete with each other and are willing to work at low remuneration. The low-paid worker, then, becomes the premise for the low price of services. The provision of services at low prices helps the company undercut its competitors and create its own monopoly in the market. Since workers are not considered employees of the company but freelancers, they can be given a task whenever there is demand. In situations of low demand, they can keep themselves logged in to the platform, since for the company, there is virtually no cost of retaining these workers. Thus, from the perspective of the company, it is a win-win situation – more workers, low costs, provision of services at low prices, more and more consumers, and the potential to monopolise the market.

A well-known tactic is to provide considerable incentives to both customers and workers in the initial period. These incentives, especially those to the workers, start being reduced once a large number of workers are ‘trapped’ in the business. Almost all of the gig workers surveyed confirmed the same.

Another crucial component of the business model of the gig economy – one that is at its very core – is its evasion of labour law and regulation. Despite exercising control similar to that of an employer or boss inside a factory, companies that set up such platforms present themselves as mere ‘brokers’ or ‘matchmakers’.

Since the workers are allegedly freelancers, the company shirks off all responsibility and liability towards them. The contractual agreements between workers and companies are often drafted in a manner so as to prevent the workers from going to court. Another component of the business model is that a percentage of the workers’ earnings are deducted as commission by the company.

How Tall Claims Trap Workers

Tall claims are made about employment generation and flexible work hours, which make it easy to earn some money on the side, or maybe even during breaks amid another job. This may be true for highly skilled gig workers (coders, graphic designers, etc). But if we look at blue-collar gig workers, situated at the bottom of the skill ladder, most are trapped in low-paying, precarious, tedious work patterns.

A majority of these gig workers are caught in a cycle of long days, unpaid labour time and low earnings. An excess supply of workers means that workers often keep waiting for hours for deliveries/orders, as interviews with workers revealed. The basis of allocation of orders is not clear to them. As expected, companies do not pay these ‘freelance entrepreneurs’ for waiting between the tasks. In India, on average, Uber/Ola drivers take home a monthly income of Rs 25,000 to Rs 30,000, whereas the same is around Rs 14,000 to Rs 15000 for Swiggy or Zomato workers. A 2020 survey highlighted that almost 90% of Indian gig workers lost their income during the COVID-19 pandemic; by August 2020, as many as 90% were earning less than 60% of their pre-pandemic income on average.

It is claimed that gig economy enables workers to earn extra money by taking on a ‘gig’ during leisure hours amid his/her primary job. However, for most of the gig workers interviewed, this is their primary job. The uncertainty of earnings can be borne as long earnings are additional to other, regular wages. However, when main earnings become uncertain and low, the worker gets caught in an extremely precarious and vulnerable situation.

On top of uncertain incomes, gig workers have to bear all the expenses pertaining to work. Though called freelancers, gig workers have very little autonomy. They have no control over fares/fees that they can charge from customers they serve.

The contractual agreement with companies prevents them from striking an independent bargain with customers.


When Technology Controls Workers' Lives

Gig workers do not have control over the tasks they do, the number of tasks they can take up on any particular day, the number of hours they work, or the charges they can demand. Yet, since they are not classified as workers, they also do not have any redressal mechanism, since they are supposed to be responsible for all their actions and problems in their lives.

Technology allows for pervasive control over the worker. From the moment that a worker (say, an Uber driver) registers with a platform, the company (via the platform) demands extensive information and documents from them. After this point, monitoring becomes more intense. As the driver logs into the Uber app, he (predominantly male workers) loses control over where he has to drive to, the fare he can charge, the number of rides he takes during the day, and thus, even the hours that he works. In contrast to the claims by the company, the driver does not have the autonomy to choose the conditions of work.

If he refuses to accept a ride for any reason (too short, too risky, lower-paid work, congested route, too far from home after a long day, etc), he may be penalised. The algorithm’s constant watch is similar to and sometimes more pervasive and invasive than a factory supervisor’s or boss’s monitoring.

Gig workers bear all the risks and costs of ‘entrepreneurship’. The risk is not limited to the cost of the cars, computers and other tools. Sometimes, the pressure of speedy delivery makes flouting of traffic rules unavoidable. In case of accidents or grievous injury, intervention by the company is quite nominal. In a situation of misbehaviour by a customer, the entire risk has to be borne by the worker.


What's the Path Ahead?

In September 2021, IFAT, a registered union and federation of trade unions representing gig workers, approached the Supreme Court, seeking directions against four companies and the Union of India for violation of fundamental rights. On 13 December 2021, the Supreme Court agreed to hear this PIL. This attempt at legal intervention follows efforts by gig workers across the world to legally challenge their status as ‘freelancers’. Various courts (Paris, London, Amsterdam etc.) that have recently adjudicated claims of Uber workers or similar gig/platform workers against companies have held that these workers are in a relationship of “permanent subordination” to the companies.

One of the new Labour Codes in India, the Code on Social Security, 2020, includes the term ‘gig worker’. However, it is defined as “a person who performs work … outside of a traditional employer-employee relationship”. This explicitly underwrites the companies’ claim that workers are not ‘employees’ of the company. Thus, while the state claims to undertake the responsibility of gig workers’ social security on paper, it has not made companies accountable to workers in any way. By absolving them from standard responsibilities of employers, the state is actively colluding with companies in violating gig workers’ rights.

The state and judiciary must take steps to recognise gig workers as ‘workers’ and extend them labour rights and protection.

A starting point could be to extend the coverage of the Motor Vehicle Aggregators Guidelines, 2020, (under the Motor Vehicles Amendment Act, 2019) to cover gig workers. These stipulate minimum fares and maximum working hours, while the Act includes provisions for health insurance and term insurance by the aggregator.

Such protections must be extended and implemented by all state governments for gig workers.

Immediate measures must be taken to fix accountability of companies towards gig workers and to clearly establish mechanisms for ensuring this, including substantive penalties for violating gig workers’ labour and democratic rights.

(The authors are secretaries, PUDR. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

Speaking truth to power requires allies like you.
Become a Member
Read More